Analys från DailyFX
Price & Time: End of Year Melt Up?
Talking Points
- Indices taking out important resistance
- Euro sits just shy of new yearly high
- Gold testing key resistance zone
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Focus Chart of the Day: SP 500
As the 4th quarter nears the end of its first month traders need to pay special attention to the SP 500 and the potential implications for the end of the year. With the index up some 25% on the year so far there are two plausible scenarios we could see play out as the calendar year comes to a head. The first scenario is a ‘melt up’ as underweight investors are forced in as they try to catch up with the performance of the benchmark. The other scenario is ‘melt down’ of sorts as a few key investors lock in returns for the year early forcing a kind of domino effect as the benchmark gives back performance. With the index having broken just about every possible price and time resistance the market has thrown at it over the past few months the path of least resistance certainly look to be higher (favoring the first scenario)especially if the index can gain some traction over Gann resistance at 1743 this week. On the downside, 1708 is important support where weakness on a weekly closing basis would warn that a more important correction is developing.
Foreign Exchange Price Time at a Glance:
Price Time Analysis: EUR/USD
Charts Created using Marketscope – Prepared by Kristian Kerr
- EUR/USD traded to its highest level in 8-months on Friday before encountering resistance just under the year-to-date high at 1.3710
- Our trend bias remain positive on the Euro while over Gann support at 1.3595
- The year’s high at 1.3710 is a natural upside attraction with traction above exposing Fibonacci and Gann points at 1.3755 and 1.3770
- A turn window is seen around the end of the week
- A move under 1.3595 would undermine the immediate positive tone in the pair and focus lower
EUR/USD Strategy: Like the long side while 1.3595 holds.
Price Time Analysis: AUD/USD
Charts Created using Marketscope – Prepared by Kristian Kerr
- AUD/USD traded to its highest levels since early June today
- Our near-term trend bias remains positive on the Aussie while above Gann support near .9500
- The 9th square root progression of the year’s high at .9665 is an important pivot with strength above needed to propel towards a Fibonacci attraction at .9710
- A potentially important turn window is in effect over the next couple of days
- Weakness under .9500 on a daily close basis will turn the near-term trend bias to negative on the exchange rate
AUD/USD Strategy: Like reducing long postions into the upcoming turn window.
Price Time Analysis: GOLD
Charts Created using Marketscope – Prepared by Kristian Kerr
- XAU/USD has moved steadily higher from last week’s cycle turn window
- However, while under the 2nd square root progression of the month-to-date low at 1321 our near-term trend bias has to remain lower in the metal
- The 1×1 Gann angle line of the year’s low at 1265 is critical support and a daily close below is really needed to re-invigorate downside prospects
- Some minor turn windows are seen over the course of the week
- A daily close over 1321 will turn us positive on Gold
XAU/USD Strategy: Square here, but may look to get long on a daily close over 1321.
— 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
Analys från DailyFX
EURUSD Weekly Technical Analysis: New Month, More Weakness
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.
Analys från DailyFX
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
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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