Price And Time Technical Analysis Of Currency Pairs
Price & Time Analysis: USD/JPY
- USD/JPY closed over the 3rdsquare root relationship of the year-to-date high on Tuesday
- Our near-term trend bias is now higher in the exchange rate
- The 2nd square root relationship of the year’s low at 102.75 is critical resistance that needs to be overcome soon to signal that a more important move higher is taking hold
- A cycle turn window is seen around the middle of next week
- A daily close below the 4th square root relationship of the year’s high at 101.35 would turn us negative again on USD/JPY
USD/JPY Strategy: Like being square for the time being, but may look to buy a break of 102.75.
Price & Time Analysis: USD/CHF
- USD/CHF tested the .8935 61.8% retracement of the December to January range again today
- Our near-term trend bias is higher while over .8935
- The 3rd square root relationship of the year’s low at .9080 is key resistance and needs to be breached to signal a resumption of the uptrend
- A cycle turn window is seen Friday/Monday
- A daily close below .8935 would turn us negative on the rate
USD/CHF Strategy: May look to buy next week.
Focus Chart of the Day: S&P 500
The S&P 500 has rallied aggressively since reversing during last week’s cycle turn window. A move through 1850 would confirm the significance of last week’s low and set up a further push higher into the next turn date of importance in March and possibly even into 3Q14. Yesterday the index encountered good resistance near the 78.6% retracement of the year-to-date range at 1827. A retracement of the 80+ handle move over the last week seems natural. Such a decline could extend all the way to Gann support at 1780 without inflicting any real sort of technical damage. A move below 1780 on a daily close basis would begin to cloud the positive technical outlook, but only aggressive weakness below 1738 would completely undermine the positive technical structure. Such an occurrence would signal a major shift in the index’s behavior and set up a more important distribution phase. This is not our favored scenario – just yet.