Analys från DailyFX
Price & Time: Dow 30
Talking Points
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- EUR/USD stalls at key Gann level
- USD/JPY fails at Fibonacci retracement
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Foreign Exchange Price Time at a Glance:
Price Time Analysis: EUR/USD
ChartPrepared by Kristian Kerr
- EUR/USD touched its highest level in a month yesterday before stalling out near the 1×1 gann angle line of the May high
- The close above 1.1100 has shifted our near-term trend bias higher in the exchange rate
- A push through the Gann level around 1.1180 is needed to set off a more important push higher
- A minor turn window is seen today
- A close under 1.1040 would turn us negative again on the euro
EUR/USD Strategy: Trailing stop triggered yesterday – Square.
Price Time Analysis: USD/JPY
ChartPrepared by Kristian Kerr
- USD/JPY traded to its highest level in two months on Wednesday before reversing sharply at the 88.6% retracement of the June – July decline near 125.20
- Our near-term trend bias is still higher in the exchange rate while above 124.00 (closing basis)
- Traction over 124.70 is needed to alleviate some of the immediate downside pressure and re-instill upside momentum
- A minor turn window is seen tomorrow
- A daily close under 124.00 would turn us negative on USD/JPY
USD/JPY Strategy: Like the long side while over 124.00 (closing basis).
Focus Chart of the Day: DOW 30
There has been a lot of talk over the past few days about the purported “death cross” in the Dow Jones Industrial Average. I have never really been one for moving average crossovers, but I know that market pundits have it wrong here. A true death cross actually requires that both moving averages be sloping lower. In the case of the Dow this clearly isn’t the case as the 200-day moving average is still moving up. You could say that getting a crossover to occur after both moving averages have turned lower rarely ever happens, but that is precisely the point. A death cross as the name implies is supposed to be rare, but meaningful occurrence – not just a simple crossover. Supposedly it is an extra variable that helps determine when a meaningful trend shift is looming. I will leave that to the quants to decide. Like I said I am not a “crossover guy”, but it is just something to be aware of given all the recent hoopla.
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— 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.
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
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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
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
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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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