Dailyfx | Nov 20, 2014 11:27AM ET
Charts Created using Marketscope – Prepared by Kristian Kerr
EUR/USD Strategy: Like the short side while below 1.2580.
Instrument |
Support 2 |
Support 1 |
Spot |
Resistance 1 |
Resistance 2 |
EUR/USD |
*1.2440 |
1.2500 |
1.2540 |
1.2560 |
*1.2580 |
Charts Created using Marketscope – Prepared by Kristian Kerr
GBP/USD Strategy: Like the short side while under 1.5840.
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Instrument |
Support 2 |
Support 1 |
Spot |
Resistance 1 |
Resistance 2 |
GBP/USD |
1.5565 |
*1.5620 |
1.5690 |
*1.5720 |
1.5790 |
With markets trending again (perhaps more importantly in the desired direction of the monetary authorities) there is a lot of excitement about a continuation of these trends into the end of the year. A so called “Santa Claus rally” so institutional managers can lock up performance fees. In the FX realm, Santa Claus is clearly focused on USD/JPY as I keep hearing of year-end targets of 125.00. Perhaps this year will be like all the rest, but I have a feeling it won’t. An abundance of key cyclical relationships in the yen all coincide in December (the first part of the month and the days before Christmas look the most significant). With sentiment towards the yen at some of the most extreme levels I have ever seen (JPY at single digit DSI on day, week, 2-week and 3-week time frames) USD/JPY is looking vulnerable to a decent shakeout next month. For the record, this year-end “surprise” would not be without precedent. Just take a look at the price action in USD/JPY from December of 2005 to see what can happen when the market as a whole is leaning the same way and looking for the same thing. Coincidentally 125.00 was a popular year-end Santa Claus rally target then too.
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
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