Price & Time: GBP/USD Under Pressure

Talking Points

• USD/JPY fails at Gann resistance
• USD/CHF threatening new lows
• GBP/USD at key price & time point

Unfamiliar with Gann Square Root Relationships? Learn more about them HERE.

Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: USD/JPY

Charts Created using Marketscope – Prepared by Kristian Kerr

• USD/JPY has come under renewed pressure following last week’s failure at the 3rd square root relationship of the year’s high near 103.75
• Our near-term trend bias remains positive in the rate while above 101.35
• Interim resistance is seen around 103.40, but traction over 103.75 is really needed to signal that a new move higher of importance is unfolding
• A minor cycle turn window is seen today
• A close under 101.35 would turn us negative on USD/JPY

USD/JPY Strategy: Like the long side while 101.35 holds.

Price & Time Analysis: USD/CHF

Charts Created using Marketscope – Prepared by Kristian Kerr

• USD/CHF has come under renewed pressure on Wednesday
• Our near-term trend bias is lower in USD/CHF while below .8910
• Immediate support is seen at .8445 ahead of the 127% extension of the Dec/Jan advance at .8700
• A cycle turn window is see later next week
• Only aggressive strength back over the 38% retracement of the year-to-date range at .8910 would turn us positive on the exchange rate

USD/CHF Strategy: Look to sell on strength while below .8910.

Focus Chart of the Day: GBP/USD

It is do or die for Cable over the next day or so, at least from a short-term cyclical perspective. As mentioned in yesterday’s weekly outlook webinar the middle of the week is a potential turn window in GBP/USD. If the price action over the last few weeks has only been a consolidation within a broader uptrend then time wise this is where the market should try to turn up. Price wise, this morning the exchange rate cracked the 38% retracement of the February range near 1.6600. This is clearly a negative development, but we view the 2nd square root relationship of the year’s high at 1.6560 as the critical “line in the sand”. If the more positive scenario is to unfold then this is the level that needs to hold (on a closing basis). A clear breach of 1.6560 likely opens the way for a deeper decline into an important turn window seen around the end of the month. On the upside, a move back through 1.6635 is needed to relieve immediate downside pressure and suggest a turn is indeed underway.

To receive Kristian’s analysis directly via email, pleaseSIGN UP HERE.

--- 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 [email protected]. Follow me on Twitter @KKerrFX