Price & Time: Dollar Dead Cat or Real Reversal?

Talking Points

  • EUR/USD turns at key retracement level
  • GOLD overcomes important Gann level
  • DJ FXCM US DOLLAR INDEX at a crossroads

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Foreign Exchange Price Time at a Glance:

Price Time Analysis: EUR/USD

Price amp; Time: Dollar Dead Cat or Real Reversal?

Charts Created using Marketscope – Prepared by Kristian Kerr

  • EUR/USD has come under modest pressure since failing at the 38% retracement of the May/June decline earlier in the week
  • Our near-term trend bias is higher in the euro while over 1.3590
  • A daily close over 1.3690 is eyed to signal that a new leg higher in unfolding
  • An important cycle turn window is seen through Monday in the euro
  • A move below 1.3590 will turn us negative on the exchange rate

EUR/USD Strategy: Square, not sure if the euro tries for one more high.

Price Time Analysis: GOLD

Price amp; Time: Dollar Dead Cat or Real Reversal?

Charts Created using Marketscope – Prepared by Kristian Kerr

  • XAU/USD tested the 61.8% retracement of the March/June decline near 1334 earlier this week
  • Our near-term trend bias is higher in the metal while over 1286
  • A push through 1334 is now needed to signal a resumption of the trend
  • A minor cycle turn window is seen early next week
  • A daily close below 1286 would turn us negative on Gold

XAU/USD Strategy: Like buying on weakness against 1286.

Focus Chart of the Day: DJ FXCM US DOLLAR INDEX

Price amp; Time: Dollar Dead Cat or Real Reversal?

The DJ FXCM US Dollar Index has begun to show signs of life over the past couple of days following a test and slight undercut of the early May low around 10,370. The near-term cyclical picture looks generally positive on the Greenback for the next week or two (though we clearly cannot rule out some aggressive two-way action around the data later). The 10,420 level looks like an important near-term pivot with strength over this level needed to confirm a minor low and set up a further push towards a key Gann attraction by 10,465. 10,370 should obviously hold if our near-term positive view is correct, but only weakness below last year’s 10,354 second half low would signal a broader breakdown in the buck.

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

To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter @KKerrFX

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