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Price & Time: Breakout Coming in EUR/JPY?

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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.

Foreign Exchange Price Time at a Glance:

EUR/USD:

PT_eurjpy_body_Picture_4.png, Price amp; Time: Breakout Coming in EUR/JPY?

Charts Created using Marketscope – Prepared by Kristian Kerr

EUR/USD failed last week just above the 50% retracement of the year-to-date range in the 1.3225 area

Subsequent weakness has been unimpressive, but while under 1.3225 our bias remains lower in the exchange rate

-The 6th square root progression of the year-to-date high which coincides with the 2nd square root progression of last week’s high in the 1.3015 area needs to give way to trigger a more important decline

-Short-focused cycle analysis suggests that a minor turn window is in effect today

-A breach of 1.3225 would shift our bias to higher in the exchange rate

Strategy: Risk remains that a broader top is building. Like the short side while under 1.3225

NZD/USD:

PT_eurjpy_body_Picture_3.png, Price amp; Time: Breakout Coming in EUR/JPY?

Charts Created using Marketscope – Prepared by Kristian Kerr

NZD/USD found resistance last week at a convergence of the 1st square root progression of the year-to-date high and the 1×3 Gann line from the year’s high close in the .8580 area

-Weakness from this level has been modest and a move back under the 1×1 Gann line from the year-to-date closing high now in the .8460 area is needed to signal the start of a more important decline

-Time cycles indicate that a minor turn window is in effect over the next couple of days

-The 61.8% retracement of the mid-April decline in the .8555 area is immediate resistance

-However, only traction above .8580 confirms the Bird has resumed its broader advance

Strategy: Want to see .8580 or .8460 break before positioning.

EUR/GBP:

PT_eurjpy_body_Picture_2.png, Price amp; Time: Breakout Coming in EUR/JPY?

Charts Created using Marketscope – Prepared by Kristian Kerr

EUR/GBP traded to its lowest level since late January last week before finding support at the 38% retracement of the July to February advance in the .8400 area

Our bias remains lower in the cross, but a close under .8400 is really needed to trigger a more important decline

-Time cycle analysis indicates that turn window exists around the second half of the week

-The 4th square root progression from the year-to-date high in the .8440 area is immediate resistance

-Only strength over the 38% retracement of the late April decline in the .8490 turns us positive on the crossrate

Strategy: Prefer the short side whilst below the .8490 level.

Focus Chart of the Day: EUR/JPY

PT_eurjpy_body_Picture_1.png, Price amp; Time: Breakout Coming in EUR/JPY?

We are watching the price action in EUR/JPY very closely. As we have noted before, the early April peak came right on a Pi cycle turn window related to the 2012 low. The late April secondary peak coincided with a similar Gann square of nine relationship. Given the importance of the two cycle points registered last month we would have expected to see more downside in the wake of them. However, the weakness that has followed has been uninspired leaving a fairly bullish consolidation on the daily chart. A push over last month’s 131.10 high and offsetting two key levels of “time resistance” in the days ahead would be a very positive development for the cross and set the stage for another important move higher – we like buying the break if it occurs. Of course there is a chance the cross could still be forming a top, but the odds of this are diminishing the closer we get to last month’s highs. Only weakness below last week’s low near 127.00 would re-focus lower.

Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter @KKerrFX

Are you looking for other ways to pinpoint support and resistance levels? Take our free tutorial on using Fibonacci retracements.

Need guidance managing risk on trades? Download the free Risk Management Indicator.

To receive other reports from this author via e-mail, sign up to Kristian’s e-mail distribution list via this link.

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

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

EURUSD Weekly Technical Analysis: New Month, More Weakness

—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.

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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

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

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