Weekly Price & Time: Gold & Yen Seeing Extremes in Sentiment

DailyFX

Talking Points

  • EUR/USD stalls under key long-term retracement
  • USD/JPY prints 5-year high
  • Gold closes at lowest level of the year

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Weekly Foreign Exchange Price & Time at a Glance:

Weekly Price & Time Analysis: EUR/USD

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WPT_DEC_20_body_Picture_3.png, Weekly Price & Time: Gold & Yen Seeing Extremes in Sentiment

Charts Created using Marketscope – Prepared by Kristian Kerr

  • EUR/USD failed this week just shy of the 61.8% retracement of the 2011/2012 decline at 1.3830
  • Our broader bias is positive on the Euro and will remain so while above 1.3590
  • The 1.3830 level and the 50% retracement of the 2008/2010 decline near 1.3955 are critical on the upside with traction above required to set off a more important move higher in 2014
  • The last week of the year looks like an important cyclical inflection point
  • A move under the 2nd square root relationship of the year’s high at 1.3595 would turn us negative on the Euro

Weekly EUR/USD Strategy: Looking to sell around the end of the year.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

EUR/USD

1.3540

*1.3595

1.3675

1.3770

*1.3830

Weekly Price & Time Analysis: USD/JPY

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WPT_DEC_20_body_Picture_2.png, Weekly Price & Time: Gold & Yen Seeing Extremes in Sentiment

Charts Created using Marketscope – Prepared by Kristian Kerr

  • USD/JPY traded to its highest level in over 5 years this week
  • Our broader trend bias is positive in the exchange rate while above 101.60
  • The 100% extension of the September/October decline 104.50 is important resistance with traction above now needed to extend the advance
  • A medium-term cycle turn window is seen around the end of the year
  • Only a move under 101.60 would undermine our positive view on the exchange rate

Weekly USD/JPY Strategy: Like being long against 101.60

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

USD/JPY

*101.60

102.90

104.15

*104.50

105.60

Weekly Price & Time Analysis: GOLD

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WPT_DEC_20_body_Picture_1.png, Weekly Price & Time: Gold & Yen Seeing Extremes in Sentiment

Charts Created using Marketscope – Prepared by Kristian Kerr

  • XAU/USD closed at its lowest level of the year on Thursday
  • Our broader trend bias is negative in the metal while below the 1x2 Gann angle line of the August high near 1253
  • The year’s intraday low near 1180 is an important near-term pivot with weakness below this level needed to confirm a more important decline
  • A medium-term cycle turn window is eyed around the end of the year
  • A daily close back over 1253 is needed to turn us positive on Gold

Weekly XAU/USD Strategy: Like being square here with sentiment so lopsided in the metal at the moment.

Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

XAU/USD

1160

*1180

1204

1215

*1253

--- 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

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

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