Unfamiliar with Gann Square Root Relationships? Learn more about them here.
Foreign Exchange Price & Time at a Glance:
Price & Time Analysis: EUR/USD
EUR/USD Strategy: Square for the moment. Want to see how the rate reacts into the cycle turn window.
Price & Time Analysis: GBP/USD
GBP/USD Strategy: Like the long side while over 1.6615.
Focus Chart of the Day: USD/JPY
The price action in USD/JPY over the past couple of weeks has been uninspired to say the least. The 2nd square root relationship of the year's low at 102.75 has been formidable resistance so far keeping rally attempts well contained. The next couple of days look important for USD/JPY from a short-term cyclical perspective and we should learn a lot more about where the rate stands in the bigger picture scheme of things. A high during this time (perhaps even briefly above 102.75) followed by a turn lower under 101.35 would suggest to us that the decline that started in USD/JPY at the start of the year is resuming. Given the narrowing range on the daily chart such a move would likely be swift and aggressive. The more positive scenario requires that USD/JPY gain traction over 102.75 and hold over this level into late on Thursday. Such an occurrence would likely lead to an important move higher as the rate plays "catch up" with other pro-risk markets. We slightly favor the former at the moment.
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.