Price & Time: Opportunity in an Often Overlooked Currency

Talking Points

• USD/JPY fails at key Gann resistance
• Gold hits “time resistance”
• Important next few days for USD/CAD

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 traded at its highest level in three weeks on Tuesday, but encountered strong resistance at the 2ndsquare root relationship of the year’s low in the 102.75 area
• Our near-term trend bias is higher in the rate while above 101.35
• The 102.75 area remains critical resistance and is a barrier that must be overcome soon if the rate is to commence a more meaningful move higher
• A cycle turn window is seen over the next couple of days
• A daily close below the 4th square root relationship of the year’s high at 101.35 would turn us negative on USD/JPY again

USD/JPY Strategy: Square here awaiting a clear break of 102.75.

Price & Time Analysis: GOLD

Charts Created using Marketscope – Prepared by Kristian Kerr

• XAU/USD touched its highest level since late October on Tuesday before reversing sharply
• Our near-term-trend bias is higher while above 1280
• The 61.8% retracement of the October to December decline near 1336 is a key upside pivot that needs to be breached to set off the next important leg higher in the metal
• A cycle turn window was seen on Tuesday
• A daily close below 1280 would turn us negative on the metal

XAU/USD Strategy: Like the long side while over 1280, but position reduced into this turn window.

Focus Chart of the Day: USD/CAD

The next few days should be significant for USD/CAD from a time perspective. A longer-term “Pi cycle” related to the 2012 low will be converging with several shorter-term oriented cycles in the rate through Monday. This confluence of timing techniques increases the odds, in our view, that price will undergo some sort of reversal over the next few days. Given the counter-trend decline in USD/CAD is now in its 4th week, we are on the lookout for a resumption of the long-term uptrend (upside reversal) and view this turn window as an opportunity to align ourselves with this broader trend. Key Gann levels come into play at 1.0910 and 1.0805. Continued weakness in Funds after Monday of next week would mean our positive cyclical view is wrong.

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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 [email protected]. Follow me on Twitter @KKerrFX