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Dollar Falters at Chart Barrier, S&P 500 Reversal Risk Remains

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THE TAKEAWAY: The US Dollar is retreating after being rejected at technical resistance while SP 500 positioning continues to hint at the possibility of a downward reversal.

Don’t have access the Dow Jones FXCM US Dollar Index? Try the USD basket via Mirror Trader as an alternative. **

US DOLLAR TECHNICAL ANALYSIS – Prices slipped back below the 23.6% Fibonacci expansion at 10820, exposing the 14.6% level at 10772. A further push below that eyes the July 29 low at 10693. Alternatively, a move back above 10820 targets the 38.2% expansion at 10899.

Forex_Dollar_Falters_at_Chart_Barrier_SP_500_Reversal_Risk_Remains_body_Picture_5.png, Dollar Falters at Chart Barrier, Samp;P 500 Reversal Risk Remains

Daily Chart – Created Using FXCM Marketscope 2.0

** The Dow Jones FXCM US Dollar Index and the Mirror Trader USD basket are not the same product.

SP 500 TECHNICAL ANALYSIS – Prices put in a Hanging Man candlestick below resistance at 1710.90, the 100% Fibonacci expansion, hinting at indecision and warning a turn lower may be ahead. Near-term support is at 1687.40, the May 22 high, followed by the 76.4% Fib at 1675.10. Alternatively, a break above resistance aims for the 123.6% Fib at 1746.70.

Forex_Dollar_Falters_at_Chart_Barrier_SP_500_Reversal_Risk_Remains_body_Picture_6.png, Dollar Falters at Chart Barrier, Samp;P 500 Reversal Risk Remains

Daily Chart – Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS Prices broke lower as expected after putting in a Bearish Engulfing candlestick pattern below resistance at the top of a rising channel set from late June. Sellers are now challenging the 14.6% Fibonacci expansion at 1301.68, with a break below that exposing the 23.6% level at 1273.98. Channel bottom support-turned-resistance is now at 1341.47.

Forex_Dollar_Falters_at_Chart_Barrier_SP_500_Reversal_Risk_Remains_body_Picture_7.png, Dollar Falters at Chart Barrier, Samp;P 500 Reversal Risk Remains

Daily Chart – Created Using FXCM Marketscope 2.0

CRUDE OIL TECHNICAL ANALYSIS Prices advanced as expected after putting in a Bullish Engulfing candlestick pattern. A break above initial resistance at 106.49, the 23.6% Fibonacci expansion, has exposed the 38.2% level at 108.85. A further push above that aims for the 50% Fib at 110.77. The 106.49 mark has been recast as near-term support, with a reversal back beneath that eyeing the July 30 low at 102.66.

Forex_Dollar_Falters_at_Chart_Barrier_SP_500_Reversal_Risk_Remains_body_Picture_8.png, Dollar Falters at Chart Barrier, Samp;P 500 Reversal Risk Remains

Daily Chart – Created Using FXCM Marketscope 2.0

Written by Ilya Spivak, Currency Strategist for Dailyfx.com

To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak

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EURUSD Weekly Technical Analysis: New Month, More Weakness

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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

EURUSD Weekly Technical Analysis: New Month, More Weakness

—Written by Paul Robinson, Market Analyst

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You can follow Paul on Twitter at@PaulRobinonFX.

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Euro Bias Mixed Heading into October, Q4’17

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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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British Pound Reversal Potential Persists Heading into New Quarter

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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

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