Price & Time: Price Action Confirms the Importance of 1.3220 in EUR/USD

DailyFX

EUR/USD closes week right on a critical level while USD/JPY threatens to break crucial resistance. AUD/USD finds support at a “secret” retracement.

To receive other reports from this author via e-mail, sign up to Kristian’s e-mail distribution list via this link.

Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: USD/JPY

View gallery

.
PT_EUR_13220_body_Picture_4.png, Price & Time: Price Action Confirms the Importance of 1.3220 in EUR/USD

Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/JPY convincingly broke above resistance at 98.60 to trade to its highest level in a month on Monday
  • While over 96.70 our near-term trend bias will remain higher in the exchange rate
  • An important Gann convergence between 99.45 and 99.65 is a major upside pivot with traction above required to signal the resumption of the broader uptrend
  • A medium-term cycle turn window is seen around the middle of the week
  • Intermediate support is seen around 97.50, but only weakness below 96.70 would turn the technical outlook negative

USD/JPY Strategy: Like the long side whilst over 96.70.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

USD/JPY

*96.70

97.65

99.20

*99.65

99.90

Price & Time Analysis: AUD/USD

View gallery

.
PT_EUR_13220_body_Picture_3.png, Price & Time: Price Action Confirms the Importance of 1.3220 in EUR/USD

Charts Created using Marketscope – Prepared by Kristian Kerr

  • AUD/USD rebounded last week off the 88.6% retracement of the August range in the .8890 area
  • While over .8890 our near-term trend bias is higher in the Aussie
  • Important Gann resistance is seen around .9040 with a close above now required to confirm the start of a more important upside move
  • A minor turn window is seen around the middle of the week
  • Weakness below .8890 will turn us negative on the exchange rate

AUD/USD Strategy: Like the long side against .8890.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

AUD/USD

*0.8850

*0.8890

0.8995

*0.9040

0.9085

Price & Time Analysis: GOLD

View gallery

.
PT_EUR_13220_body_Picture_2.png, Price & Time: Price Action Confirms the Importance of 1.3220 in EUR/USD

Charts Created using Marketscope – Prepared by Kristian Kerr

  • XAU/USD failed last week on a closing basis at the 7th square root progression of the year-to-date low near 1418
  • While over the the 2nd square root progression of last month’s high in the 1355 area our near-term trend bias will reamain higher
  • A close over 1418 now needed to signal a resumption of the uptrend
  • A minor turn window is seen around the middle of the week
  • A close under 1355 would turn the near-term outlook to negative in the metal

XAU/USD Strategy: Like the long side while above 1355.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

XAU/USD

*1355

1376

1390

*1418

*1441

Focus Chart of the Day: EUR/USD

View gallery

.
PT_EUR_13220_body_Picture_1.png, Price & Time: Price Action Confirms the Importance of 1.3220 in EUR/USD

We wrote about the importance of 1.3220 last week. It can be read here. Interestingly on Friday after a break of this level by almost 50 pips intraday the Euro came back to close the day, week and month right at 1.3220. After many years of observation we have found such “magnetic” behavior is not that uncommon around Gann levels of importance. Given Friday was also an important cycle turn window, the intraday reversal off 1.3170 back to 1.3220 is suggestive of a potential broader upside resumption in EUR/USD. Strength over 1.3315 would be further confirmation of this notion. Weakness, on the other hand, below 1.3170 would reinvigorate immediate downside possibilities.

--- 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 the Euro in real time? Try the Speculative Sentiment Index.

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

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.

View Comments (0)