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Price & Time: A Central Bank Blinks

By Kristian Kerr
Published: January 15, 2014

Instruments covered today: EUR/USD, USD/JPY & EUR/CHF

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.
Foreign Exchange Price & Time at a Glance:
Price & Time Analysis: EUR/USD
Dec

2015

MVA(EUR/USD.C lose,200): 1.30683

MVA(EUR/USD.C lose,20): 1.20195
MVA(EUR/USD.C lose,50): 1.22715
MVA(EUR/USD.C lose,200): 1.30683

1.27010
1.2700

1.2600
1.25840
1.25800
1.2500
1.24670

0.786 1.24587

1.2400
1.23500
1.2300
1.22350
1x2

1.272 1.21583

0.500 1.21330

1.2200
1.21150
1.2100

1.618 1.20466
1.2000
1.19950

1.1900
1.18750
1.1800
1.17550

2.618 1.17240

1.1700
1.16827
1.16350
1.1600

3.141 1.15553
1x3
11/26/2014

12/02

12/04

12/08

12/10

12/12

12/16

12/18

12/22

12/24

12/29

12/31

01/05/2015

01/07

01/09

01/13

01/15

01/17

OBV(EUR/USD): -2,595,638

0
-1,000K
-2,000K

ROC (EUR/USD.C lose, 17): -4.46413

0.00000

-2.50000

FXC M Marketscope 2015

-5.00000

Charts Created using Marketscope Prepared by Kristian Kerr

EUR/USD touched its lowest level since 2003 earlier this morning
Our near-term trend bias remains lower in the euro while below 1.1880
The 1.1640 area is now a key near-term pivot with weakness below this level needed trigger the next
serious push lower
A medium-term turn window is eyed tomorrow, but a more significant turn date is seen later this
week
A close over 1.1880 would turn us positive on EUR/USD
EUR/USD Strategy: Like the short side while below 1.1880.
Instrument

Support 2

Support 1

Spot

Resistance 1

Resistance 2

EUR/USD

1.1600

*1.1640

1.1680

1.1725

*1.1880

Trading on margin carries a high level of risk, and may not be suitable for all investors. Any opinions, news, research, analyses, prices, or other information contained is
provided as general market commentary, and does not constitute investment advice. DailyFX assumes no responsibility for errors, inaccuracies or omissions in these
materials, and will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance
on such information. DailyFX does not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials.
Opinions and estimates constitute our judgment and are subject to change without notice. Past performance is not indicative of future results.

DailyFX Research

www.dailyfx.com
www.fxcm.com
1.212.897.7600
1.888-50-FOREX

Price & Time Analysis: USD/JPY

Dec

2015

MVA(USD/JPY.C lose,200): 107.527

122.00
121.610
2x1

0.786 120.493

1x1

121.00
120.703
120.560
120.00
119.630
119.520

0.618 119.436

119.00

0.500 118.695
1x2
0.382 117.953

118.500
118.460
118.00

1x1
1x1
0.618 116.930

117.400
117.00

1x3

116.598
116.340
116.330
116.00

0.382 115.476
1x4

115.300
115.230
115.00

1.000 114.528
0.272 114.119

114.262
114.00

0.500 113.511
113.00
0.618 112.298
8x1

0.618 111.546

112.00

FXC M 1x8
Marketscope 2015
11/03/2014

11/13

11/19

11/25

12/01

12/05

12/11

12/17

12/23

12/30

01/06/2015

01/12

01/16

Charts Created using Marketscope Prepared by Kristian Kerr

USD/JPY continues to flirt with the 5th square root relationship of the 2014 high at 116.35
A near-term trend bias is negative on the rate while below 118.00
A close below 116.35 is needed to signal the start of a more important push lower
A minor turn window is eyed late this week/early next week
A close above 118.00 will turn us positive on USD/JPY

USD/JPY Strategy: Like the short side while below 118.00.

Instrument
USD/JPY

Support 2

Support 1

Spot

Resistance 1

Resistance 2

115.55

*116.35

116.60

116.95

*118.00

Trading on margin carries a high level of risk, and may not be suitable for all investors. Any opinions, news, research, analyses, prices, or other information contained is
provided as general market commentary, and does not constitute investment advice. DailyFX assumes no responsibility for errors, inaccuracies or omissions in these
materials, and will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance
on such information. DailyFX does not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials.
Opinions and estimates constitute our judgment and are subject to change without notice. Past performance is not indicative of future results.

DailyFX Research

www.dailyfx.com
www.fxcm.com
1.212.897.7600
1.888-50-FOREX

Focus Chart of the Day: EUR/CHF

The big debate over the past few years has been about bubbles and whether we are seeing them in bonds,
stocks and various other instruments. It seems the various financial collapses over the past 17 years have
somehow made people more attuned to the boom-bust cycle of the financial markets. A common response I
get from people whenever we engage in this great debate is that if everybody is looking for a bubble it
probably really isnt one. As a general contrarian I am sympathetic to this line of thinking, but I think it is
totally wrong. The bubbles we are experiencing in various markets are really just a byproduct of a much
bigger bubble in central banking. The belief in central banks and their ability to manipulate asset market
trends at will most certainly has been at or near all-time highs over the past few months and in this bubble I
can almost guarantee that nobody is looking for it. Ask just about anybody about a freely trade instrument
these days and it will begin with Well, the Fed (or ECB or BOJ or PBOC or SNB, etc) is doing this.
Central banks are the only game in town. I like to think of myself as a pretty die hard member of the
Austrian School. I dont think primary market trends can be manipulated indefinitely and like all bubbles I
believe this one will eventually crumble. I was starting to have my doubts as to when, but todays 35 big
figure fiasco in the Swiss Franc has ironically restored my faith in markets. The primary trend reasserted
itself with a vengeance!

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

Trading on margin carries a high level of risk, and may not be suitable for all investors. Any opinions, news, research, analyses, prices, or other information contained is
provided as general market commentary, and does not constitute investment advice. DailyFX assumes no responsibility for errors, inaccuracies or omissions in these
materials, and will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance
on such information. DailyFX does not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials.
Opinions and estimates constitute our judgment and are subject to change without notice. Past performance is not indicative of future results.