Analys från DailyFX
Dollar Flirts with 4-Month Low, SPX 500 Eyeing Trend Boundary
Talking Points
- US Dollar Selling Continues as Prices Test Below June Swing Bottom
- SP 500 Edging to Support Defining Rising Trend from November 2012
- Gold Recovery Capped at Chart Resistance, Bias Favors Weakness
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US DOLLAR TECHNICAL ANALYSIS – Prices are testing support in the 10450-69 area, marked by the June 13 low and the 38.2% Fibonacci expansion. A break below that aims for the 50% level at 10410. Initial resistance is at 10500, the 23.6% Fib, with a turn above that eyeing the 14.6% barrier at 10530.
Daily Chart – Created Using FXCM Marketscope 2.0
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SP 500 TECHNICAL ANALYSIS – Prices moved lower as expected, completing a bearish Evening Star candlestick pattern. Sellers narrowly cleared support at 1675.80, the 38.2% Fibonacci expansion, to expose the 50% level at 1668.70. This barrier is reinforced by a rising trend line set from November 2012, with a break downward targeting the 61.8% Fib at 1661.50. A reversal back above 1675.80 eyes the 23.6% expansion at 1684.60.
Daily Chart – Created Using FXCM Marketscope 2.0
GOLD TECHNICAL ANALYSIS – Prices rebounded from horizontal support at 1275.51 to retest a recently broken upward-sloping barrier, now at 1327.55. A break above that eyes a falling trend line set from the August high at 1334.92 and the 38.2% Fibonacci retracement at 1337.32.
Daily Chart – Created Using FXCM Marketscope 2.0
CRUDE OIL TECHNICAL ANALYSIS– Prices are wedged between support at 100.88, a horizontal pivot dating back to April 2012, and the underside of a rising channel set from early July (104.81). A break higher targets a falling channel top at 105.62, followed by the underside of a rising trend line set from mid-April (106.94). Alternatively, a push through support aims for the 100.00 figure.
Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
Contact and follow Ilya on Twitter: @IlyaSpivak
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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
—Written by Paul Robinson, Market Analyst
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You can follow Paul on Twitter at@PaulRobinonFX.
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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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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