Price & Time: Euro Within Striking Distance of A New Yearly High

DailyFX

Talking Points

  • EUR/USD closing in on a new YTD high
  • GBP/USD testing important Gann resistance
  • Kiwi stalls at important Fibonacci level

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Focus Chart of the Day: EUR/USD

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PT_euro_body_Picture_4.png, Price & Time: Euro Within Striking Distance of A New Yearly High

The successful hold of the 1.3475 Gann support level in EUR/USD on Wednesday has prompted an aggressive move higher over the past couple of days putting the Euro within striking distance of new year-to-date highs. Our best guess from a short-term cycle standpoint is that general strength will persist into the cycle turn window seen around the second half of next week before more legitimate medium-term topping prospects materialize. Respectively, the 9th and 10th square root progression of the year’s low at 1.3770 and 1.3880 will act as natural attractions during this timeframe. Only unexpected aggressive weakness below 1.3595 would warn that the single currency has peaked ahead of schedule. From a longer-term perspective the middle of November remains an important potential turn window for the Euro.

Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: GBP/USD

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PT_euro_body_Picture_3.png, Price & Time: Euro Within Striking Distance of A New Yearly High

Charts Created using Marketscope – Prepared by Kristian Kerr

  • GBP/USD found support Wednesday at the 9th square root progression of the year’s low near 1.5895
  • Subsequent strength back over 1.6135 has shifted our near-term trend bias to positive in Cable
  • Immediate attention is on the 8x1 Gann angle line of the year’s highs at 1.6225 with a close above needed to prompt the next important push higher in the rate
  • A minor turn window is seen early next week
  • Only a daily close below Gann support at 1.6085 would undermine the immediate positive tone and focus lower

GBP/USD Strategy: Square here. Looking to buy on weakness.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

GBP/USD

1.6015

*1.6085

1.6185

*1.6225

1.6300

Price & Time Analysis: NZD/USD

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PT_euro_body_Picture_2.png, Price & Time: Euro Within Striking Distance of A New Yearly High

Charts Created using Marketscope – Prepared by Kristian Kerr

  • NZD/USD traded to its highest level since early May on Thursday before encountering resistance at the 78.6% retracement of the year-to-date range in the .8525 area
  • Our near-term trend bias remains higher in the Bird while over .8340
  • The .8525 level looks like formidable resistance and a clear break above is needed to signal a resumption of the underlying trend
  • A minor turn window is seen at the start of next week
  • Only a daily close below the 2nd square root progresssion of Thursday’s high at .8340 would turn us negative on the Kiwi

NZD/USD Strategy: Like the long side while over.8340.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

NZD/USD

*0.8340

0.8445

0.8495

*0.8525

0.8540

Price & Time Analysis: S&P 500

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PT_euro_body_Picture_1.png, Price & Time: Euro Within Striking Distance of A New Yearly High

Charts Created using Marketscope – Prepared by Kristian Kerr

  • S&P 500 has moved aggressively higher over the past couple of weeks after finding support at the 2nd square root progression of September high in the 1650 area
  • Our near-term trend bias is positive on on the index while over 1710
  • The 5th square root progression of the June low at 1743 is the next resistance of note with a move through there exposing Fibonacci attractions at 1758
  • The first and latter part of next week are minor turn windows in the index
  • Only a close below the 4th square root progression of the June low at 1710 would turn us negative on the S&P 500

S&P 500 Strategy: Like the long side while over 1710.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

S&P 500

*1710

1730

1737

*1743

1758

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

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

Looking for a way to pinpoint sentiment extremes in real time? Try the Speculative Sentiment Index.

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

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