Analys från DailyFX
Price & Time: The Death Zone
Talking Points
- EUR/GBP at important cyclical juncture
- USD/JPY breaks key support
- USD/CAD nearing important Fibonacci resistance
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Focus Chart of the Day: EUR/GBP
The decline from the early August of .8768 is 45 (trading) days old today. In several of his writings, WD Gann remarked that persistent trends in commodities (or in his case currencies) often terminate around 45 days. Analysts after Gann have dubbed this interval the “Gann Death Zone”. The trend in EUR/GBP over the past couple of months has certainly been persistent with only two minor corrections witnessed during that span. With the cross testing a major support area in the form of the 5th square root progression of the year’s high there looks to be plenty of potential for some sort of counter trend move in the days ahead. A close over .8400 would be initial confirmation. Weakness back under .8345, on the other hand, would warn the cross is set to fall towards downside attractions at .8285.
Foreign Exchange Price Time at a Glance:
Price Time Analysis: USD/JPY
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/JPY broke below important Gann support at 97.50 on Wednesday to trade to its lowest level in over a month
- Our near-term trend bias is now lower in the exchange rate
- Further weakness below the 61.8% retracement of the June to July advance at 96.75 is really needed to confirm that a more important decline is underway
- Caution is required here as the next two days are a very clear cycle turn window
- Back above the 1×1 Gann line of the year’s high at 98.25 would relieve some pressure, but only over Gann resistance at 98.65 would turn us positive again on the rate
EUR/USD Strategy: Broke key support but too close to the turn window. We like being square for a couple of days as it plays out.
Price Time Analysis: USD/CHF
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/CHF closed at its lowest level since March of last year on Wednesday
- Our near-term trend bias remains lower in the exchange rate while below Gann resistance at .9070
- Focus currently is on the 9th square root progression of the year’s high at .8950 with a move below needed to expose important downside attractions at .8860
- The short-term cyclical picture has become very muddled with yesterday’s weakness
- Only a move over .9070 on a daily close basis would turn us positive on USD/CHF
USD/CHF Strategy: Like the short side while below .9070.
Price Time Analysis: USD/CAD
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/CAD has moved steadily higher since finding support near the 4th square root progression of the year’s high near 1.0195 a couple of weeks ago
- Strength through Gann resistance near 1.0300 has shifted our near-term trend bias to positive in Funds
- The 38% retracement of the July to September decline at 1.0345 is a clear upside pivot with traction above needed to prompt a a move towards upside attractions just above 1.0400
- The end of the week is a minor cycle turn window in the rate
- Weakness below long-term Fibonacci support at 1.0265 would turn us negative on Funds
USD/CAD Strategy: Looking to buy on weakness.
— 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
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
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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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