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EUR/USD 1.0870/80 Could Be Big

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  • EUR/USD 1.0870/80 could be big
  • NZD/USD follows through on weekly reversal
  • USD/CAD breakout-heads up on mid-1.3200s.

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EUR/USD

Weekly

EUR/USD 1.0870/80 Could Be Big

Chart Prepared by Jamie Saettele, CMT

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-EUR/USD has been trading sideways since March 2015. This is one of the longest sideways periods in history (as defined by the length of time between 52 week closing price extremes) and the eventual break will trigger a significant directional move. My contention has been that the move will be higher given the presence of the 31 year trendline. Strength above 1.1185 would suggest that the upside is viable. Until then, there is nothing bullish to work with on the near term charts but be aware of 1.0870/80 as a reaction level. As always, define your risk points (read more about traits of successful traders here).

-For forecasts and 2016 opportunities, check out the DailyFX Trading Guides.

GBP/USD

Weekly

EUR/USD 1.0870/80 Could Be Big

Chart Prepared by Jamie Saettele, CMT

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-The gap to open trading post-Brexit is thus far of the breakaway variety. The current level (slope lines) and/or 1.2500 could inspire a ‘squeeze’ as part of consolidation before another leg lower. 1.2500 relates the 2009-2014 range (127.2% of that range from the 2014 high) and decline from 2007 (decline from 2014 = .618% of 2007-2008 decline). Former supports at 1.3500-1.3700 should now be watched for resistance. Remember, there is a 96 month (8 year) cycle low count.

AUD/USD

Weekly

EUR/USD 1.0870/80 Could Be Big

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

-Price action since early 2015 may compose a broad bottoming process. Strength through .7750 or so (parallel resistance) would strongly suggest that the next move is towards the mid .80s. Until then, market conditions are best described as range with supports at .7450 (now), .7380, and .7280 and resistance near .7719.

NZD/USD

Weekly

EUR/USD 1.0870/80 Could Be Big

Chart Prepared by Jamie Saettele, CMT

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-The last NZD/USD weekly update noted that “a long term parallel and major horizontal levels (including the 1988 high) could cap the rally from August 2015…Kiwi has been trading around this long term inflection point (line off of the 1985 and 1993 lows) for 4 weeks and this week’s weekly key reversal might cap the rally.” Weakness followed through on last week’s reversal. Watch .6900 for clues on the next move.

USD/JPY

Weekly

EUR/USD 1.0870/80 Could Be Big

Chart Prepared by Jamie Saettele, CMT

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-Recent updates have noted that “price has stabilized in the vicinity of the noted 2000 and 2014 lows but whether or not the last week is a pause or a change in trend is unanswerable right now. Strength above 105.40 is needed in order to suggest that the upside is again viable. Until then, the area around 95 (next historical inflection point and 61.8% of rally from 2011) looms as a magnet.” USD/JPY turned up sharply from the well-defined long term horizontal level and traction above 105.40 is a positive. Focus in the weeks and months ahead is higher (although the daily gyrations will probably prove tricky).

USD/CAD

Weekly

EUR/USD 1.0870/80 Could Be Big

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

-The most recent weekly comments noted that “the bullish engulfing candle from May is still there of course but the rally has failed at the 55 week average. FXTW pays attention to this because this average was support for the last 3 years. Former support just provided resistance so USD/CAD may be transitioning to a bearish phase.” USDCAD is attempting to break higher from 11 weeks of sideways trade. Upside potential is bolstered by a breakdown in crude but don’t forget about the 55 week average as a level that could induce failure.

USD/CHF

Weekly

EUR/USD 1.0870/80 Could Be Big

Chart Prepared by Jamie Saettele, CMT

See REAL TIME trader positioning

-Oh USD/CHF where are you going? Failed breakout attempts late in 2015 and early in 2016 warned of an eventual downside break. However, downside probes (April through June) have held a multi-year support line. The holding pattern that has persisted since March 2015 will eventually give way to the next trending phase towards either the low .80s or 1.16-1.17. I’m not smart enough to know which way the market will break and I’m not dumb enough to pretend to know. Trend developments are positive while above .9683.

Analys från DailyFX

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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Analys från DailyFX

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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Analys från DailyFX

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

To be added to Christopher’s e-mail distribution list, please fill out this form

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