PriceTime Commodity Currencies Getting Fatigued?

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Talking Points

• EUR/USD recovers from important Gann level
• NZD/USD closing in a key resistance
• USD/CAD entering important cyclical turn period

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Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: EUR/USD

Charts Created using Marketscope – Prepared by Kristian Kerr

• EUR/USD remains in a sideways to higher range above the 4th square root relationship of the year’s low at 1.3520
• Our near-term trend bias is higher in the exchange rate while over 1.3520
• A daily close over 1.3675 is needed to prompt a more significant move higher in the exchange rate
• A cycle turn window is seen around the end of the month
• A close below 1.3520 would re-focus lower

EUR/USD Strategy: Flat. Looking to buy euros around month-end.

Price & Time Analysis: NZD/USD

Charts Created using Marketscope – Prepared by Kristian Kerr

• NZD/USD traded to a new high for the month to start the week before coming under modest pressure over the past couple of days
• Our near-term trend bias is higher in the Bird while over .8640
• Interim resistance is eyed around .8705 ahead of a key Fibonacci retracement at .8735
• A cycle turn window is seen around month-end
• A daily close below .8640 would turn us negative on the exchange rate

NZD/USD Strategy: Like the long side for a few more days.

Focus Chart of the Day: USD/CAD

The next few days should prove important for USD/CAD. A convergence of several medium-term cyclical relationships around this time suggest the exchange rate is vulnerable to some kind of reversal - or at least an attempt at one. An idealized turn around level is the 1.0650 area as it marks a convergence of the 6th square root relationship of the year’s high and the 100% projection of the March/April decline, but barring an unlikely final spike lower this is probably just a little too far away to be relevant. As such, our focus remains on the 50% retracement of the March/April advance near 1.0730. A daily close over 1.0770 is needed to confirm that a reversal is underway. Longer-term cyclical analysis suggests any recovery that materializes from this turn window is likely to be fairly short lived. New cycle lows in Funds after Tuesday would mean our near-term positive view was wrong.

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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.

-- 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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