Analys från DailyFX
Price & Time: 4th Quarter Trends Underway?
Talking Points
- EUR/GBP flirting with important technical break
- USD/CHF fails at important resistance zone
- Gold bottoms during important cycle turn window
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Focus Chart of the Day: EUR/GBP
The 1×1 Gann angle line in EUR/GBP from the August high of .8768 has proven strong resistance so far. On Friday of last week it came in at about .8510 which proved to be the high of the day and the high so far of the rebound from .8330. Earlier today the Gann line (now closer to .8490) was briefly overcome, but a daily close over the level is really required to confirm a break and signal that the move higher this month has been more than just a correction of the prevailing downtrend. From a cyclical perspective, the next turn window of significance is looks to be late next week for the cross. We still like buying it on any weakness over the next couple of days.
Foreign Exchange Price Time at a Glance:
Price Time Analysis: USD/JPY
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/JPYcontinues to meander around the 98.00 area
- Wednesday’s daily close over 98.60 has shifted our near-term trend bias back to positive
- However, strength over the 4th square root progression of the year’s high at 99.65 is really needed to get us more excited about further material upside
- Some minor turn windows are seen on Friday and the middle of next week
- It would take a decline below the 7th square root progression of the year’s high at 96.60 to turn us negative on the exchange rate
USD/JPY Strategy: Narrowing range is proving frustrating. Like being square until we get some more clarity.
Price Time Analysis: USD/CHF
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/CHF failed yesterday at a convergence of the 8th square root progression and the 2×1 Gann angle line of the 2012 high near .9175
- Our near-term trend bias remains lower while below this important resistance level
- The 10th square root progression of the 2012 high at .8975 remains an important attraction and a daily close below this level is really needed to signal a broader downside resumption
- A turn window is seen around the middle of next week
- A move through .9175 at any time would turn us immediately positive on the exchange rate.
USD/CHF Strategy: Retaining existing short positions, but now against .9175 (absolute basis) versus prior .9155 (daily close).
Price Time Analysis: GOLD
Charts Created using Marketscope – Prepared by Kristian Kerr
- XAU/USD has rebounded sharply from the 1250 support area during the medium-term cycle turn window slated for this week
- A daily close over the 2nd square root progresion of Tuesday’s low at 1322 will shift the near-term trend bias to positive in the metal
- The 1×1 Gann angle line of the year’s closing low at 1264 remains critical support
- Early next week is a minor cycle turn window
- Weakness below 1264 on a daily close basis is really required to signal that a more important decline is still unfolding
XAU/USD Strategy: Square here, but may look to buy on a daily close over 1322.
— Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
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
Looking for a way to pinpoint sentiment extremes in real time? Try the Speculative Sentiment Index.
To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter @KKerrFX
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
Confidence is essential to successful trading, see this new guide – ’Building Confidence in Trading’.
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
You can receive Paul’s analysis directly via email bysigning up here.
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
To be added to Christopher’s e-mail distribution list, please fill out this form
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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