Price & Time: What To Lookout For In EUR/USD Over the Next Few Days

Talking Points

• USD/JPY break key retracement level
• SPX fails just shy of key Gann level
• EUR/USD reverses from key cycle turn window

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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: USD/JPY

Charts Created using Marketscope – Prepared by Kristian Kerr

• USD/JPY overcame the 78.6% retracement of the month-to-date range today to trade at its highest level in three weeks
• Our near-term trend bias is higher in the exchange rate while over 107.65
• A close over 109.70 is now needed to confirm a resumtion of the broader uptrend
• A minor turn window is eyed tomorrow
• A close back under 107.65 would turn us negative on USD/JPY

USD/JPY Strategy: Like the long side while over 107.65.

Price & Time Analysis: S&P 500

Charts Created using Marketscope – Prepared by Kristian Kerr

• S&P 500 traded at its highest level in over a month yesterday before failing just shy of the 4th square root relationship of the month’s low in the 1994 area
• Our near-term trend bias is higher in the index while over 1950
• A push through 1994 is needed to alleviate concerns that the recent leg higher is only corrective
• The next turn window of important looks to be next week
• A close under 1250 would turn us negative on the index

S&P 500 Strategy: Square.

Focus Chart of the Day: EUR/USD

EUR/USD reversed sharply from the mid-week cyclical turn window we have been highlighting over the past few days. Subsequent weakness today has seen the exchange rate probe beneath the key 1.2580 78.6% retracement of the month-to-date range. The middle of next week looks to be the next timing point of note and if the euro is indeed starting down again like we think then we would like to see the rate trade under 1.2500 before then. Failure to do so would greatly raise the risk that the consolidation period isn’t quite yet over and still has at least a week left and possibly two. An unexpected close over 1.2735 would also undermine our immediate negative view.

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This publication attempts to further explore the concept that mass movements of human psychology, as represented by the financial markets, are subject to the mathematical laws of nature and through the use of various geometric, arithmetic, statistical and cyclical techniques a better understanding of markets and their corresponding movements can be achieved.

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter @KKerrFX