Price & Time: Caution Required in the Kiwi Over the Next Few Days

Talking Points

• 
  USD/JPY turn window coming up
  


• 
  Important timing eyed in the stock market next week
  


• 
  Kiwi reversal ahead?
  

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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: USD/JPY

Charts Created using Marketscope – Prepared by Kristian Kerr

• 
  USD/JPY found resistance earlier in the week at the 4×1 Gann angle line of the year-to-date low in the 102.15 area
  


• 
  Our near-term trend bias remains lower in USD/JPY while below 102.80
  


• 
  The 101.35 4th square root relationship of the year’s high remains a major downside pivot with a daily close under this level required to signal the start of a more meaningful decline
  


• 
  An important cycle turn window is eyed at the start of June
  


• 
  A daily close over 102.80 would shift our near-term trend bias positive.
  

USD/JPY Strategy: Like the short side while below 102.80 and adding on a daily close below 101.35.

Price & Time Analysis: S&P 500

Charts Created using Marketscope – Prepared by Kristian Kerr

• 
  SPX recorded yet another new all-time high on Wednesday
  


• 
  The short-term trend bias is positive on the index while above 1860
  


• 
  Major Gann resistance is seen near 1920 and a multi-day close over this level is needed to signal that some sort of blow off move higher is underway
  


• 
  The first part of June looks important for the index from a Gann timing perspective and at least a minor reversal looks probable around this time
  


• 
  Aggressive weakness under 1860 is needed turn the trend bias lower, but weakness under 1899 would warn a minor top is in place
  

SPX Strategy: Like reducing longs next week. 1920 area looks very important.

Focus Chart of the Day: NZD/USD

NZD/USD has embarked on a steady decline since peaking out at the beginning of the month near important Gann resistance at .8770 (8th square root relationship of the year-to-date low). On Wednesday the exchange rate finally closed below the late April .8515 low triggering a double top type pattern on the daily charts. According to classic technical analysis this is the time to sell. Cyclical analysis paints a different picture, however, as the next couple of days look quite important from a timing perspective. From where we stand the rate actually looks quite vulnerable to a short-term reversal which at a minimum should give better levels to sell next month. New trend lows in the Bird after Monday would nullify this near-term positive outlook.

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— 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.

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

Price & Time: Caution Required in the Kiwi Over the Next Few Days