Analys från DailyFX
Price & Time: Markets Looking to be Nearing a Tipping Point
Talking Points
- SP 500 at important near-term inflection point
- USD/JPY closing in on apex of multi-month triangle
- Gold trying to gain traction over key Gann support
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Focus Chart of the Day: SP 500
The next couple of days are important for the stock market. If the weakness following the failure last week at the 1735 Fibonacci projection level in the SP 500 has indeed just been a correction within the primary uptrend then this is where the index should try to turn higher. A move back through 1710 (especially on a daily close basis) would be confirmation of this positive scenario. Continued weakness, on the other hand, after today and below the 50% retracement of the August to September advance at 1680 would warn that a more important topping process is playing out. While this is by no means our favored scenario, we cannot completely discount it following last week’s failure to achieve a weekly close over 1710.
Foreign Exchange Price Time at a Glance:
Price Time Analysis: USD/JPY
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/JPY continues to meander around the 50% retracement of the May to June range in the 98.75 area
- While above a confluence of Gann and Fibonacci levels at 97.60 our near-term trend bias will remain higher
- The 4th square root progression of the year’s high at 99.65 is an important near-term pivot with traction above needed to re-invigorate upside prospects
- A medium-term cycle turn window is spied around the second half of next week
- Only aggressive weakness below97.60 on a daily close basis will force us to re-assess
USD/JPY Strategy: Like the long side while over 97.60
Price Time Analysis: USD/CHF
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/CHF fell to its lowest level in almost six months at the start of the week before finding support just ahead of the 9th square root progression of the 2012 high near .9070
- Our near-term trend bias remains lower in the exchange rate while below the 7th square root progression of the year’s high at .9145
- A daily close below .9070 is now needed to signal a resumption of the broader decline towards attractions at .9020 and below
- The 1st half of next week is a clear medium-term cycle turn window
- A daily close above .9145 would warn that USD has bottomed ahead of schedule
USD/CHF Strategy: Like the short side while below .9145, but we also like taking some off the table as we head into next week’s turn window.
Price Time Analysis: GOLD
Charts Created using Marketscope – Prepared by Kristian Kerr
- XAU/USD found support on Tuesday at the 1×2 Gann angle line of the 2012 high at 1307
- Our near-term trend bias is higher in the metal while above 1290
- The 1350 Gann zone remains an important near-term pivot with strength above needed to confirm an upside resumption
- A minor cycle turn window is seen early next week
- Weakness below 1290 especially on a daily close basis would turn the technical outlook very negative
XAU/USD Strategy: Like the long side while above 1290.
— 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 Gold 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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