Dailyfx | May 07, 2014 12:14PM ET
Foreign Exchange Price & Time at a Glance:
Charts Created using Marketscope – Prepared by Kristian Kerr
EUR/USD Strategy: Like the long side (reduced) while over 1.3870.
Instrument |
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Support 2 |
Support 1 |
Spot |
Resistance 1 |
Resistance 2 |
EUR/USD |
*1.3870 |
1.3900 |
1.3930 |
1.3940 |
*1.3970 |
Charts Created using – Prepared by Kristian Kerr
XAU/USD Strategy: Like the long side while 1270 holds.
Instrument |
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Support 2 |
Support 1 |
Spot |
Resistance 1 |
Resistance 2 |
XAU/USD |
*1270 |
1300 |
1309 |
1320 |
*1331 |
We have written a lot recently about the importance of this week for USD/Europe from a timing perspective. If aGreenback reversal is going to materialize then it should happen around this time. Quickly this week is also becoming critical for USD/JPY. Initially we were looking for a secondary high to occur sometime this week as well, but the reaction in the exchange rate after US employment data on Friday seems to have led to an important high slightly earlier than expected. The reaction over the next few days at the 4th square root relationship of the year’s high near 101.35 will be extremely important in our view. A clear breach of this level (especially on a closing basis) will confirm the start of an important leg lower in USD/JPY. With implied volatility so low and complacency running high the possibility of a very aggressive decline that catches the markets off guard looks strong in our opinion. Failure to break under 101.35 by the end of the week would improve the picture, but only a move over 103.10 turns us positive.
--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
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