Price & Time: Gold Breaks Major Resistance - Now What?

DailyFX

Gold & the S&P 500 break major levels while USD/JPY fails at Gann resistance.

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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: USD/JPY

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PT_gold_body_Picture_4.png, Price & Time: Gold Breaks Major Resistance - Now What?

Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/JPY touched the 5th square root progression of the year’s high at 98.60 on Thursday before reversing sharply
  • While over 96.55 our near-term trend bias will remain higher in the rate
  • The 98.60 level is now a clear upside pivot with strength over this level needed to signal a more important move higher
  • Friday is a minor cycle turn window
  • Weakness below 96.55 on a closing basis would turn the technical outlook negative

USD/JPY Strategy: Like the long side whilst over 96.55.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

USD/JPY

95.95

96.60

97.45

97.60

*98.60

Price & Time Analysis: USD/CAD

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PT_gold_body_Picture_3.png, Price & Time: Gold Breaks Major Resistance - Now What?

Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/CAD continues to trade in a sideways to higher range above the 1.0285 2x1 Gann angle line of the 2012 low
  • While Funds is below 1.0380 our near-term trend bias will remain lower
  • A move under 1.0285 is now needed to trigger a more important decline
  • A medium-term turn window is see around the middle of next week
  • Strengh above 1.0380 is needed to improve the negative technical structure and tun us positive on the rate

USD/CAD Strategy: Like the short side on a move through 1.0285.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

USD/CAD

1.0235

*1.0285

1.0325

*1.0380

*1.0440

Price & Time Analysis: S&P 500

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PT_gold_body_Picture_2.png, Price & Time: Gold Breaks Major Resistance - Now What?

Charts Created using Marketscope – Prepared by Kristian Kerr

  • S&P 500 broke below a key support level at 1672 on Thursday
  • Our near-term trend bias is now negative in the index
  • The 38% retracement of the June to August advance near 1650 is immediate support and weakness below there is requred to set up a more important decline
  • Near-term cycles studies suggest today could be signficant for the market
  • A close back over 1672 would alleviate some of the downside pressure, but above 1710 is really needed to put the index back in a truly positive position

S&P 500 Strategy: Like being short while below 1710.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

S&P 500

1638

*1650

0.8615

1672

*1710

Focus Chart of the Day: XAU/USD

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PT_gold_body_Picture_1.png, Price & Time: Gold Breaks Major Resistance - Now What?

Gold underwent an important break on Thursday as it managed to close over both key Fibonacci symmetry at 1348 and the 1x2 Gann angle line of 2012 high near 1360. This break of key resistance now puts the index in a much more positive technical position and increases the possibility that a more important low was indeed recorded during the late June Gann cycle turn window. However, the metal is not quite out of the woods just yet as the 78.6% retracement of the June range, the 61.8% projection of the June to July advance and the 6th square root progression of the June low all lurk overhead between 1372 and 1384. A clear breach of these levels would definitively further improve the metal’s outlook. That said, only weakness under 1280 undermines the positive tone in XAU/USD and turns the outlook overtly negative.

--- 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 Gold 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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