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.
Foreign Exchange Price & Time at a Glance:
USD/JPY:
Charts Created using Marketscope – Prepared by Kristian Kerr
-USD/JPY is in consolidation mode above the 93.50 measured move of the mid-March decline
- Focus is still lower with a clear break of 93.50 needed to trigger a more important decline
-Time cycle analysis suggests a low could be seen around the middle of the week, but a bigger picture Pi cycle turn window related to the 2011 low is in effect at the end of the week (See Focus Chart of the Day)
- An Andrews line in the 94.35 area is immediate resistance
- However, only strength above a convergence of Gann angle lines near 95.40 turns us positive on the exchange rate
Strategy: Looking to sell the dollar on a break of 93.50 over the next few days. May look to get long around the middle of next week.
USD/CAD:
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/CAD traded to its lowest level in over a month on Thursday before finding support at the 50% retracement of the year-to-date range
- We are still negative on Funds, but a confluence of several key Gann and Fibonacci levels in the the 1.0120/40 area could prove formidable
- A medium-term cycle turn window is effect over the next couple of days and a change in trend is probable during this time
- The 38% retracement of the late March decline near 1.0195 is immediate resistance
- Strength over the 1×1 Gann line from the year-to-date high near 1.0240 is really needed, however, to turn us positive on the pair
Strategy: We are short a half unit of Funds from 1.0235. We took off the other half at 1.0180. Looking to take profit on this remaining position if 1.0140 is given. Stop is at cost.
GBP/USD:
Charts Created using Marketscope – Prepared by Kristian Kerr
- GBP/USD has rebounded over the past few days after finding support at the 38% retracement of the late March advance
- Our bias is higher, but strength over the 50% retracement of the 2009 range at 1.5255 is needed to setup a deeper upside correction
– A Gann time cycle window related to the year-to-date high in the second half of the week suggests a change in trend could be seen during this time
- A convergence of Gann angle lines related to the year’s range and the 38% retracement of the late March move at 1.5095 is now critical resistance
- Clear weakness below this level will turn us negative on the exchange rate
Strategy: Exited our remaining long position from 1.4940 at 1.5110 for a nice profit. May look to sell Cable in the latter half of the week. Under 1.5095 will probably get us short.
Focus Chart of the Day: USD/JPY
In addition to the Gann related cyclical turn windows we noted this upcoming week in the euro and Cable, there is also a key turn window in USD/JPY(starts next Friday). This particular cycle is a Pi relationship with the late October 2011 low as it will be 17.2 months (8.6×2) since the start of this current uptrend. This particular time frequency is one of the more useful ones we keep track of in the ebb and flow of the currency markets and often times leads to important changes in trend. A recent example of this time cycle leading to a top of significance can be seen in NZD/USD, as the year-to-date high of .8530 recorded in mid-February came almost exactly 8.6 months from last year’s low seen in early June. We must say such ‘clean’ reversals are more the exception than the rule, but we will be keeping a close eye on USD/JPY at the end of the week and the first half of the week of April 8th as any change in trend that materializes during this time could be quite significant.
— Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter @KKerrFX
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Price & Time: Big Week for Some Currencies From a Time Perspective
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