Analys från DailyFX
Absent Fiscal Deal Sparks Rise in FX Volatility, Uncertainty for US Dollar
Talking Points:
– Day sixteen of the US government shutdown: the debt deal that would cover costs into the 1Q’14 in question.
– US debt limit hit on October 17 (tomorrow).
– House Republicans reject bipartisan Senate bill that would have ended stalemate.
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INTRADAY PERFORMANCE UPDATE: 09:40 GMT
Dow Jones FXCM Dollar Index (Ticker: USDOLLAR): -0.09% (-0.13% prior 5-days)
ASIA/EUROPE FOREX NEWS WRAP
A breakdown in talks between Democrats and Republicans late on Tuesday jolted market participants and put an immediate halt to the bubbling optimism that began at the end of last week. The US Dollar, which had shown signs of basing amid a resolution of the fiscal deadlock, has taken a modest step lower again as uncertainty reigns just one day before the debt limit is hit.
Headlines after the US cash equity session have proved to be the major determinant of price action in both the Asian and European sessions. The safe haven currencies swung violently against the commodity currencies in particular, with the many of the major’s daily ranges having been set during the illiquid 16:00 EDT/20:00 GMT to 20:00 EDT/00:00 GMT interssion break.
The shift in the expected outcome of the US fiscal negotiations yesterday – a medium-term resolution to nothing at all – has only had a modest impact on risk appetite. One needs to look no further than the AUDJPY, which is up by +0.35% on the day. Uncertainty, with respect to the US Dollar however, is rising. Take note of the overnight change in implied volatiltiy over the next week:
Percent Change 1-week Implied Volatility: October 15 to October 16, 2013
Of note, expectations for US Dollar volatility jumped by +6.07% and +8.06% against the Swiss Franc and the Japanese Yen, respectively, a sign that the US Dollar may continue to suffer against its safe haven counterparts over the coming days – perhaps on the heels of a less-than-optimal (with the standard being yesterday’s purported three-month continuing resolution to reopen the government and four-month debt limit extension).
USDJPY 5-minute Chart: October 16, 2013 Intraday
Thus far today, traders have been fading the uptick in the USDJPY from the start of the Asian session, and today’s daily Inverted Hammer, Inside Bar highlights the hesitation among traders as the debt deadline approaches at the end of today.
Read more: Euro Needs Signs of Continued Economic Recovery Before Next Rally
ECONOMIC CALENDAR – UPCOMING NORTH AMERICAN SESSION
See the DailyFX Economic Calendar for a full list, timetable, and consensus forecasts for upcoming economic indicators. Want the forecasts to appear right on your charts? Download the DailyFX News App.
— Written by Christopher Vecchio, Currency Analyst
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
Follow him on Twitter at @CVecchioFX
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Analys från DailyFX
EURUSD Weekly Technical Analysis: New Month, More Weakness
What’s inside:
- EURUSD broke the ‘neckline’ of a bearish ‘head-and-shoulders’ pattern, April trend-line
- Resistance in vicinity of 11825/80 likely to keep a lid on further strength
- Targeting the low to mid-11600s with more selling
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Coming into last week we pointed out the likelihood of finally seeing a resolution of the range EURUSD had been stuck in for the past few weeks, and one of the outcomes we made note of as a possibility was for the triggering of a ’head-and-shoulders’ pattern. Indeed, we saw a break of the ’neckline’ along with a drop below the April trend-line. This led to decent selling before a minor bounce took shape during the latter part of last week.
Looking ahead to next week the euro is set up for further losses as the path of least resistance has turned lower. Looking to a capper on any further strength there is resistance in the 11825-11880 area (old support becomes new resistance). As long as the euro stays below this area a downward bias will remain firmly intact.
Looking lower towards support eyes will be on the August low at 11662 and the 2016 high of 11616, of which the latter just happens to align almost precisely with the measured move target of the ‘head-and-shoulders’ pattern (determined by subtracting the height of the pattern from the neckline).
Bottom line: Shorts look set to have the upperhand as a fresh month gets underway as long as the euro remains capped by resistance. On weakness, we’ll be watching how the euro responds to a drop into support levels.
For a longer-term outlook on EURUSD, check out the just released Q4 Forecast.
EURUSD: Daily
—Written by Paul Robinson, Market Analyst
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You can follow Paul on Twitter at@PaulRobinonFX.
Analys från DailyFX
Euro Bias Mixed Heading into October, Q4’17
Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.
EURUSD: Retail trader data shows 37.3% of traders are net-long with the ratio of traders short to long at 1.68 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.07831; price has moved 9.6% higher since then. The number of traders net-long is 15.4% lower than yesterday and 16.4% higher from last week, while the number of traders net-short is 0.4% higher than yesterday and 10.5% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Positioning is more net-short than yesterday but less net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EURUSD trading bias.
— Written by Christopher Vecchio, CFA, Senior Currency Strategist
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
Follow him on Twitter at @CVecchioFX
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Analys från DailyFX
British Pound Reversal Potential Persists Heading into New Quarter
Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.
GBPUSD: Retail trader data shows 38.2% of traders are net-long with the ratio of traders short to long at 1.62 to 1. In fact, traders have remained net-short since Sep 05 when GBPUSD traded near 1.29615; price has moved 3.4% higher since then. The number of traders net-long is 0.1% higher than yesterday and 13.4% higher from last week, while the number of traders net-short is 10.6% lower than yesterday and 18.3% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse lower despite the fact traders remain net-short.
— Written by Christopher Vecchio, CFA, Senior Currency Strategist
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
Follow him on Twitter at @CVecchioFX
To be added to Christopher’s e-mail distribution list, please fill out this form
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