Price & Time: Pi & USD/JPY

DailyFX

This daily 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 obtained.

Foreign Exchange Price & Time at a Glance:

EUR/USD:

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AUD_Finds_Support_At__Keyy_Gann_Lwevel_body_Picture_4.png, Price & Time: Pi & USD/JPY

Charts Created using Marketscope – Prepared by Kristian Kerr

-EUR/USD has seen follow though weakness from last week’s failure at the convergence of the 1x3 Gann line from the 2011 high and the 1-year standard deviation channel

-Support so far being found near the 1.3375 1x2 Gann angle line from 2011

-This level now key as a close below will signal deeper correction towards Fibonacci retracement support near 1.3300 at least

-Shorter term time cyclical techniques suggest upside attempt over next couple of days probable

-Convergence of long-term Fibonacci retracement and Gann square root progression in the 1.3480-90 area now a near-term pivot with a clear break above needed to signal broader uptrend resumption

EUR/GBP:

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AUD_Finds_Support_At__Keyy_Gann_Lwevel_body_Picture_3.png, Price & Time: Pi & USD/JPY

Charts Created using Marketscope – Prepared by Kristian Kerr

-EUR/GBP has fallen sharply since peaking during last week’s important cylical window

-Thursday’s close below square root progression support at .8530 further confirms top of some significance in place

-Convergence of Fibonacci support including the 50% retracementof 2011-2012 decline and the 50% retracement of the year-to-date advancebetween .8505 and .8515 becomes the next key support zone of note

-Early next week is a minor cylical window where downside pressure could abate for a few days

-1x1 Gann angle from 2011 high and 2x1 angle from last year’s low coincide around .8500

-The level now a key level to watch on the upside with strength above required to signal near term reprieve

AUD/USD:

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AUD_Finds_Support_At__Keyy_Gann_Lwevel_body_Picture_2.png, Price & Time: Pi & USD/JPY

Charts Created using Marketscope – Prepared by Kristian Kerr

-AUD/USD has been in a weak position since breaking decisively under a pitchfork line connecting the 2011 low and the 2012 high at the start of the year

-Support found on Friday at the key 1.0260 1x1 angle connecting the June closing low and last month’s closing high

-Further weakness below there and the 38% Fibonacci retracement of the late 2012 advance near 1.0230 would be a powerful signal that a deeper decline is materializing

-Reprieve possible over the next couple of days as several shorter-term cyclical techniques indicate time is right for a directional change (see focus chart of the day)

- 1.0360 square root progression from Friday’s low now near term-resistance, but strength over the further progression near 1.0455 required to signal more important advance underway

Focus Chart of the Day: AUD/USD

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AUD_Finds_Support_At__Keyy_Gann_Lwevel_body_Picture_1.png, Price & Time: Pi & USD/JPY

Charts Created using Marketscope – Prepared by Kristian Kerr

Techniques that focus on the variable of time play an important role in our analysis. Given the fractal nature of markets many of these can be used to anticipate market movements in both the short and longer term. One technique that helps in this endeavor is the counting of trading bars. Often times, patterns can be seen related to Pi, Fibonacci and other mathematical concepts. A developing Fibonacci relationship in the daily AUD/USD chart between recent highs and lows (+/- 1-2 days) suggests there is a higher potential for a turn or acceleration over the next few days.

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

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