Technical Analysis

Talking Points

• Convergence of cyclical relationships point to USD strength ahead
• EUR/USD closing in on major downside pivot
• Big Gann resistance looms in AUD/USD

Foreign Exchange Price & Time at a Glance:
Price & Time Analysis: EUR/USD

• EUR/USD remains under pressure following the mid-month failure from just above the 50% retracement of the 2008/2010 decline
• Our near-term trend bias is lower in the Euro while below 1.3875
• The 2nd square root realtionship of the year’s high near 1.3730 is an important near-term pivot as weakness below is required to confirm that a broader move lower is unfolding
• A minor cycle turn window is seen around the middle of next week
• A move back over 1.3875 would re-focus higher

EUR/USD Strategy: We like the short side while below 1.3875.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
EUR/USD	1.3680	*1.3730	1.3755	1.3825	*1.3875

Price & Time Analysis: AUD/USD

• AUD/USD broke above the 50% retracement of the October/January decline near .9210 to trade at its highest level since November
• Our near-term trend remains higher in the Aussie while above .9160
• The 6th square root relationship of the year’s low at .9260 is important resistance and a possible point of failure over the next couple of days
• A cycle turn window is seen over the next few days
• A daily close below under .9160 would turn us negative on the exchange rate

AUD/USD Strategy: We like the long side while over .9160, but positions should probably be reduced approaching .9260.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
AUD/USD	.9130	*.9160	.9235	*.9260	.9290

Focus Chart of the Day: FXCM Dollar Index



On Monday we wrote a focus on the Dow Jones FXCM Dollar Index. The gist of the piece was that we thought a secondary low was setting up in the Greenback if it traded lower into the end of the week. The weakness we were looking for materialized as the Index has closed lower for 4 straight days now. If our cyclical analysis is correct then USD should turn up in the next few days and begin a general move higher. Our conviction is bolstered by the recent action in Gold as a similar cyclical relationship to the one that has seen the metal come under pressure recently should start to influence in the Index in the days ahead. We can’t rule out a final move lower, but only weakness after Monday under 10,500 would completely undermine the positive cyclical view. On the topside, a median line related to the 2013 high around 10,560 looks to be key resistance with a daily close over this level required to confirm that a bottom of some kind is indeed in place.

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

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• EURUSD 1.3642 and 1.3820/60 are ‘tradable’
• AUDUSD reaction levels are slightly higher
• USDCAD breakout fails; but 1.0985 is support

EUR/USD
Weekly




-EURUSD failure to hold above the line that extends off of the 2008 and 2011 highs is well documented. As mentioned the last several weeks, “the development could mark an important change in conditions. A reaction area rests at the February 2013 high of 1.3710 and a break below 1.3642 would make a stronger case for a larger topping process.”
-On Friday, EURUSD responded to the 3/5 low. Whilst a larger top appears be brewing, respect bounce potential from 1.3642. 1.3813/30 is estimated resistance.

GBP/USD
Weekly




-A weekly key reversal the week that ended 2/21 and a doji the week that ended 3/7 are warnings of a top. The rate bounced from the line that extends off of the November and February lows, keeping near term upside pressure intact.
-Given extreme COT readings, don’t forget about the reversal characteristics seen at the February top. One can’t dismiss the trendline hold this week either. Tis a battle between bullish and bearish interests and selling is eyed near 1.6665 and 1.6711 with support at 1.6567 and 1.6495.

AUD/USD
Weekly




-AUDUSD broke out this week. The head and shoulders measured target is .9500/11 but there a good deal of levels before then that could inspire a reaction. The levels in question are .9320s (see June-July levels) and .9386-.9405 (2009 high / 2011 low).
-.9150/90 is estimated support.

NZD/USD
Weekly




-NZDUSD ends March on a high note. The rate tagged the 2013 high this week and is pressing against the line that extends off of the 1996 and 2007 highs. That line crosses through the 2008, 2011, and 2014 highs as well. In 2011 (record free float high), the rate surged through the line in late July before topping on August 1st. Does something similar happen here? The channel that defines the advance from the 2011 low is just above the record high in April.

USD/JPY
Weekly




-USDJPY tested the underside of the trendline that connects the lows from November 2012 and October 2013 3 weeks ago. The top was also in line with the May 2013 high.
-Since February 1, USDJPY has spent most of its time between 101.50 and 102.75. Prognostications regarding which way the market will break are silly but I will note key levels within the multi month range at 103.25 and 102.17/32.
-Longer term, the trend is up but there is an Elliott case to be made for a return to the 4thwave of one less degree. The range spans 93.78 to 96.55. That seems drastic

USD/CAD
Weekly




-Measured objectives from the breakout above the 2011 high range from 1.1680 to 1.1910. The Jul 2009 high rests in this zone at 1.1724 and the 2007 high is near the top of the zone at 1.1875.
-From an Elliott perspective, it’s possible that the rally from the 2012 low composes a ‘3rd of a 3rd (or C)’ wave from the 2007 low.
-The close above the line that extends off of the 2002 and 2009 highs as well as the close above corrective channel resistance add credence to the 3rd of a 3rd wave position. Watch for support at 1.0985 next week. Failure to hold 1.0909 would delay the bull and open up 1.0736 (December high).

USD/CHF
Weekly




-USDCHF (and EURUSD for that matter) traded through their early March highs on Friday. The monthly ranges are small but the events qualify as ‘intra-month reversals’ nonetheless (month closes Monday). Some reversals come with a bang and some come with a whimper. Exceeding the line that extends off of the July and January highs would brighten the longer term bull case.


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Talking Points

• Important turn window coming up for Gold
• EUR/USD rebounds off minor retracement level
• AUD/USD turns lower during “Gann Death Zone”

Foreign Exchange Price & Time at a Glance:
Price & Time Analysis: EUR/USD

• EUR/USD traded at its lowest level in a month on Friday before rebounding off the 78.6% retracement of the late Feb/early March advance near 1.3700
• Our near-term trend bias is lower in the exchange rate while below 1.3875
• The 2nd square root relationship of the year’s high at 1.3730 remains a critical downside pivot with a daily close below needed to confirm that a more important leg lower is unfolding
• A minor cycle turn window is seen around the end of the week
• A move back over the the high of last week at 1.3875 would turn us positive on the Euro

EUR/USD Strategy: We like the short side while below 1.3875.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
EUR/USD	1.3705	*1.3730	1.3795	1.3830	*1.3875

Price & Time Analysis: AUD/USD

• AUD/USD traded at its highest level since late November last week, but failed several times to surpass the 6th square root relationship of the year’s low at .9260 on a closing basis
• Our near-term trend bias is higher in the Aussie while above .9160
• A close over .9260 is required to signal that the uptrend is resuming
• A Gann cycle turn window late last week suggests a top of some importance could be in place
• A move under .9160 will turn us negative on the exchange rate

AUD/USD Strategy: We like the long side while above .9160.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
AUD/USD	.9100	*.9160	.9225	*.9260	.9295

Focus Chart of the Day: XAU/USD


Gold has lost over $100 an ounce since topping out right on the March 17th cyclical turn window. On Friday the metal tested important support at the 50% retracement of the December to March range at 1285. April 4th through the 9th looks like the next turn window of importance as a couple of important relationships related to the 2011 high and the 2013 low will be converging during this period. Continued weakness in XAU/USD below 1285 in the days ahead would likely set up a low of importance heading into next week, while a recovery from this level over the next week would favor a secondary high.

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

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Talking Points:

• US Dollar Still Waiting for Direction Near March Bottom
• S&P 500 Testing Upper Bound of Recent Consolidation
• Gold Prices Near Chart Support, Crude Oil Rally Stalling

US DOLLAR TECHNICAL ANALYSIS – Prices are still trading sideways in a choppy range below resistance at 10595, the 38.2% Fibonacci retracement. A push through initial support in the 10495-500 area, marked by the 38.2% Fib expansion and the March 19 low, targets the 50% level at 10470. Alternatively, a turn back above resistance exposes the 50% Fib retracement at 10626.




S&P 500 TECHNICAL ANALYSIS – Prices remain in consolidation mode above support is in the 1847.90-53.00 area, marked by the 23.6% Fibonacci expansion, the December 31 close, and the bottom of an emerging Triangle chart formation. A break downward targets the 38.2% level at 1831.00. Alternatively, a push above downward-sloping resistance at 1871.10 aims for the March 7 high at 1888.60.



GOLD TECHNICAL ANALYSIS – Prices reversed downward as expected after putting in a Bearish Engulfing candlestick pattern. A break below the 23.6% Fibonacci expansion at 1319.01 has exposed the 38.2% level at 1273.88, with a further move below that eyeing the 50% Fib at 1237.40. Alternatively, a reversal back above 1319.01 aims for trend line support-turned-resistance now at 1352.35.



CRUDE OIL TECHNICAL ANALYSIS – Prices are pushing higher as expected after putting in a bullish Morning Star candlestick pattern. A break above resistance at 100.83, the 23.6% Fibonacci expansion, has exposed the 38.2% level at 102.87. Pushing further above that aims for the 50% Fib at 104.52. Alternatively, a move back below 100.83 exposes the 14.6% expansion at 99.57.




--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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Talking Points

• Move through March high in SPX removes major cyclical overhang
• EUR/USD resuming lower?
• Jury still out on next move in GBP/USD

Foreign Exchange Price & Time at a Glance:
Price & Time Analysis: EUR/USD

• EUR/USD has moved modestly higher since finding support late last week from just below the 2nd square root relationship of the year’s high in the 1.3730 area
• Our near-term trend bias is lower in the Euro while below 1.3785
• The 1.3730 level remain a key downside pivot with weakness below needed to confirm that a more important decline is unfolding
• A very minor cycle turn window is seen today
• Only a move back over 1.3785 would turn us positive on the exchange rate

EUR/USD Strategy: We like the short side while below 1.3785.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
EUR/USD	*1.3875	1.3835	1.3785	1.3765	*1.3730

Price & Time Analysis: GBP/USD

• GBP/USD tested resistance at the 61.8% retracement of the late Feb/March decline near 1.6685 on Monday
• Our near-term trend bias is lower in Cable while below 1.6685
• A move under 1.6600 is needed to confirm a near-term top
• A minor cycle turn window is seen tomorrow
• A move through 1.6685 will turn us positive on the exchange rate

GBP/USD Strategy: We like the short side while below 1.6685.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
GBP/USD	1.6560	*1.6600	1.6645	*1.6685	1.6730

Focus Chart of the Day: S&P 500



The price extremes of the March range in the S&P 500 have cyclical significance. Overnight the top end of this range was breached. This action further confirms the importance of the mid-March low and perhaps more importantly removes a major negative cyclical overhang for the index. Further gains are now favored in the weeks ahead and possibly even into the start of the 3rd quarter. If for some reason the index fails to achieve a daily close over 1890 this week it would raise the possibility that recent action has been a false break (especially if the Dow continues to lag). However, only swift weakness under 1830 would turn the technical picture negative and set into motion a much more volatile 2Q14. This looks much less likely following the break overnight of the March 7th high.

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

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Talking Points

• EUR/USD breaks key Gann level
• USD/JPY nearing big break?
• GOLD has an important turn window next week

Weekly Foreign Exchange Price & Time at a Glance:
Weekly Price & Time Analysis: EUR/USD

• EUR/USD has come under further pressure this past week to trade at its lowest level in a month
• A weekly close below the 2nd square root relationship of the year’s high at 1.3730 will turn us negative
• Last week’s high at 1.3875 is important resistance with a move above needed to confirm an upside resumption
• A cycle turn window is seen in the Euro mid-week

Weekly EUR/USD Strategy: May look to sell a close under 1.3730.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
EUR/USD	*1.3625	1.3655	1.3690	1.3730	*1.3875

Weekly Price & Time Analysis: USD/JPY

• USD/JPY closed over the 3rd square root relationship of the year’s low at 103.75 this week to trade at its highest level since late January
• Our broader bias is negative in the rate while below 104.40
• The 3rd square root relationship of the the year’s high around 102.35 is key support and needs to be breached to signal a downside resumption
• The middle of the week is a minor cycle turn window
• A weekly close back over 104.40 would turn us positive again on USD/JPY

Weekly USD/JPY Strategy: We like tactical short positions in USD/JPY while below 104.40 on a weekly close basis.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
USD/JPY	101.75	*102.35	103.45	103.75	*104.40

Weekly Price & Time Analysis: GOLD

• XAU/USD broke below key support at 1285 to trade at its lowest level since early February this week
• We are negative on the metal while below 1336
• The 1285 area remains key support with a weekly close below needed to signal a resumption of the downtrend
• An important turn window is seen between April 7-9
• A daily close back over 1336 will turn us positive on the metal again

Weekly XAU/USD Strategy: Like holding reduced short positions while below 1336.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
XAU/USD	1260	*1285	1305	1318	*1336

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

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• EURUSD, GBPUSD, USDCHF momentum is absent
• USDJPY ‘priced’ at channel
• USDCAD trend resumption

EUR/USD
Weekly




-EURUSD was never able to drop under 1.3642, finding low after NFP at 1.3672. Momentum wise, I am looking for a top. RSI at each top since December has been below 70. This weak momentum profile is not suggestive of a strong bull.
-1.3909 is possible resistance before the high. If the rate does trade to a new high, then a drop back into the range would be required in order to create a tradable high. It’s worth mentioning that important tops have formed in April/May in recent years.

GBP/USD
Monthly



-GBPUSD upside pressures remain intact. The line that extends off of the October and 1/2 highs crosses through the middle of the 2/17 high, which was tested this week. The line that extends off of the November and February lows pinpointed the 3/24 low. A break of the support line would suggest that February’s outside month was exhaustive.
-The momentum profile described regarding EURUSD applies to GBPUSD too. In fact, daily RSI hasn’t been above 70 since the October top. Don’t forget about extreme COT readings.

AUD/USD
Weekly



-“AUDUSD has broken out. The head and shoulders measured target is .9500/11 but there a good deal of levels before then that could inspire a reaction. The levels in question are .9320s (see June-July levels) and .9386-.9405 (2009 high / 2011 low).” AUDUSD closed above .9405 on Thursday before pulling back on Friday. This is a great place for a sharp pullback.
-Short term structure allows for another high but this is a great place for a pullback into at least the .9260s.

NZD/USD
Monthly



-NZDUSD retraced last week’s outside week reversal and pulled back to end the week near the 2013 high.
-Don’t forget about the line that extends off of the 1996 and 2007 highs. That line crosses through the 2008, 2011, and highs as well. We are there now. In 2011 (record free float high), the rate surged through the line in late July before topping on August 1st.

USD/JPY
Monthly



-USDJPY is trading on support from the line that extends off of the February and 3/14 lows. The rally from the February low channels in a corrective manner and makes 104.12 important from a bigger picture bearish perspective.
-There is an Elliott case to be made for a return to the 4thwave of one less degree. The range spans 93.78 to 96.55. Of course, the path to get to that level is far from clear. Respect breakdown potential as long as price is below 102.50.

USD/CAD
Monthly



-Measured objectives from the breakout above the 2011 high range from 1.1680 to 1.1910. The Jul 2009 high rests in this zone at 1.1724 and the 2007 high is near the top of the zone at 1.1875.
-From an Elliott perspective, it’s possible that the rally from the 2012 low composes a ‘3rd of a 3rd (or C)’ wave from the 2007 low.
-Action since the January high may compose a flat. The low at 1.0857 is in line with major inflection points on recent years as well as the 1/13 low (1.0842).

USD/CHF
Weekly



-The same momentum considerations that apply to EURUSD apply to USDCHF (the March price low occurred with RSI above 30).
-Patter wise, the decline from the 2012 high ‘fits’ well as a 3 wave correction with wave C as an ending diagonal. When (if) this market turns is up in the air. In the event of new lows, watch .8566-.8640. Above .8844 begins to turn things constructive again.

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Talking Points

• GBP/USD at minor cyclical crossroads over next couple of days
• USD/JPY testing major downside pivot
• USD/CAD rebounds off key support

Foreign Exchange Price & Time at a Glance:
Price & Time Analysis: USD/JPY

• USD/JPY is in consolidation mode just above the 4th square root relationship of the year’s high at 101.35
• Our near-term trend bias is negative on the exchange rate while below 103.00
• A daily close below 101.35 is needed to confirm the start of a more important decline
• The latter half of the week is a potentially important cycle turn window
• A move over 103.00 would turn us positive on USD/JPY

USD/JPY Strategy: Like the short side while below 103.00.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
USD/JPY	100.75	*101.35	101.70	102.75	*103.00

Price & Time Analysis: USD/CAD

• USD/CAD found support last week at the 4th square root relationship of the year’s high near 1.0860
• Our near-term trend bias is lower in Funds while below 1.1010
• A move under 1.0910 is needed to re-instill immediate downside momentum
• The next couple of days are a cycle turn window for USD/CAD
• A daily close over 1.1010 would turn us positive on the exchange rate

USD/CAD Strategy: Only reduced short positions favored while below 1.1010.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
USD/CAD	*1.0860	1.0910	1.0975	*1.1010	1.1055

Focus Chart of the Day: GBP/USD



The middle of the week remains important for GBP/USD from a timing perspective. A convergence of minor cyclical relationships towards the middle of the week suggest Cable is vulnerable to at least a minor turn around this time. Key resistance is the year’s high around 1.6785 and a square root relationship of last year’s low near 1.6850. Strength after Wednesday above 1.6850 would signal the Pound has again weathered the cyclical storm and is likely headed higher into the next key turn period around the end of the month. It would take weakness below the 2nd square root relationship of the year’s high at 1.6560 to signal that a more important top is already in place.

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

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Talking Points:

• US Dollar Technical Positioning Hints at Rebound Ahead
• S&P 500 Finds Support Above 1800, May Recover Further
• Crude Oil Struggling to Maintain Momentum Above 104.00

US DOLLAR TECHNICAL ANALYSIS – Prices put in a bullish Piercing Line candlestick pattern above support at 10401, the 76.4% Fibonacci expansion, hinting a bounce may be ahead. Breaking above the 61.8% expansion at 10439 exposes the 10475-84 area, marked by the underside of a previously broken falling channel and the 23.6% Fib retracement. Alternatively, a reversal downward below support aims for the 100% expansion at 10339.



S&P 500 TECHNICAL ANALYSIS – Prices put in a bullish Piercing Line candlestick above support at 1810.60, the 100% Fibonacci expansion, hinting a move higher is ahead. Initial resistance is at 1843.50, the 38.2% Fib retracement, followed by rising channel support-turned-resistance at 1847.90. Alternatively, a reversal below 1810.60 aims for the intersection of the 123.6% expansion and a rising trend line set from February 2013 at 1795.80.




GOLD TECHNICAL ANALYSIS – Prices turned higher as expected after putting in a Bullish Engulfing candlestick pattern. Buyers are now testing resistance at 1327.29, the 23.6% Fibonacci expansion, with a break above that exposing the 38.2% level at 1358.41. Near-term support is at 1308.11, the 14.6% Fib. A reversal back below that targets the April 1 low at 1277.00.



CRUDE OIL TECHNICAL ANALYSIS – Prices broke higher as expected out of a Triangle chart formation. Buyers are testing resistance at 104.33 marked by the 50% Fibonacci expansion, with a break above that exposing the 61.8% level at 105.98. Near-term support is at 102.68, the 38.2% Fib, followed by the 23.6% expansion at 100.64.



--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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Talking Points

• Important cyclical relationship approaching in USD/JPY
• EUR/USD rejected by minor retracement
• Gold reverses just shy of key Fibo

Foreign Exchange Price & Time at a Glance:

Price & Time Analysis: EUR/USD

• EUR/USD has come under steady downside pressure since failing last week at the 78.6% retracement of the March/April range near 1.3900
• Our near-term trend bias is positive on the Euro while over 1.3745
• A move through 1.3900 is needed signal a resumption of the uptrend
• A minor cycle turn window is seen later this week
• A move under 1.3745 will turn us negative on the Euro

EUR/USD Strategy: Like being square for a few days.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
EUR/USD	1.3705	1.3745	1.3795	1.3845	1.3900

Price & Time Analysis: GOLD



XAU/USD failed a couple of dollars shy of the 50% retracement of the March to April decline at 1334 on Monday

• Our near-term trend bias remains lower in Gold while below 1334
• A move under 1300 is needed to re-instill immediate downside momentum
• An important turn window is seen next week
• A daily close over 1334 will turn us positive on the metal

XAU/USD Strategy: Like the short side while 1334 caps.

Instrument	Support 2	Support 1	Spot	Resistance 1	Resistance 2
XAU/USD	*1277	1300	1305	*1334	1350

Focus Chart of the Day: USD/JPY



The high for the year in USD/JPY was recorded back on January 2nd at 105.43. That will be 105 calendar days at the end of the week. Simple Gann analysis suggests to be on the lookout for a change in trend (or possible acceleration in trend) around this time. This is one of Gann’s simpler methods, but also one of the more compelling. The next couple of days leading into this turn window should shed some light on what will come out of it. Strength would likely set up some sort of secondary high while a move under the March lows could see a low of some importance develop.

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

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