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.
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Foreign Exchange Price & Time at a Glance:
EUR/USD:
Charts Created using Marketscope – Prepared by Kristian Kerr
-EUR/USD has continued to move higher over the past few days and surpassed the 1x1 Gann angle line of the May high on Thursday
-Our bias remains higher in the rate, but formidable resistance lurks overhead in the form of a convergence of the 1st square root progression of the May high and the 78.6% retracement of the May range in the 1.3130 to 1.3145 area
-Traction above this zone sets up a further push higher and test of the critically important 1.3240 May high
-Time cycles point to the first half of next week as the most likely time for a turn
-The 2x1 Gann angle line from the year-to-date low now near 1.2975 remains a key support level and only weakness below this level undermines the near-term positive structure and re-focuses lower
Strategy: Small euro longs favored whilst over 1.2975. Broader picture remains negative while resistance from 1.3240 high remains intact.
AUD/USD:
Charts Created using Marketscope – Prepared by Kristian Kerr
-AUD/USD has come under further pressure after failing at key Gann resistance earlier in the week and traded to its lowest level since October of 2011 on Thursday
-While below .9670 our bias has to remain lower in the Aussie with focus on the 11th square root progression of the year-to-date high at .9425 and the 161.8% extension of the March to April advance just below .9360
-However, some caution is required as we near these levels given a Gann “death cycle” is slated for next week and change in trend is more likely during this time
-The 50% retracement of the 2010 low to the 2011 high at .9570 is now resistance
-But a close over .9670 is required to signal that a more important upside correction is unfolding
Strategy: Like reducing short position as we enter into the cyclical turn window next week. Back over .9670 focuses higher.
USD/CAD:
Charts Created using Marketscope – Prepared by Kristian Kerr
USD/CAD has traded modestly higher since finding support earlier this week at a retracement confluence in the 1.0260 area