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Price & Time: The Turn Window in USD/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_turn_windowusdjpy_body_Picture_4.png, Price amp; Time: The Turn Window in USD/JPY

Charts Created using Marketscope – Prepared by Kristian Kerr

EUR/USD recorded a new year-to-date low on the first day of the Gann cycle turn window (Thursday) before rebounding sharply to trade to its highest level in almost two weeks

Close over the 1.2840 2×1 Gann angle line from the year-to-date high has turned us positive on the exchange rate

-Focus now on the 1.3060 61.8% of the November to February advance with strength over this level needed to confirm the integrity of the latest push higher

-Medium-term Gann cycle turn window in effect, but another key cycle turn window seen late next week as well

-Weakness back under 1.2840 turns us negative on the euro

Strategy: Did not get short in the turn window with the pair well through the 1×2 Gann line and plenty exposures elsewhere. Looking to get long (in reduced size) at 1.2920 with a stop under 1.2840.

AUD/USD:

PT_turn_windowusdjpy_body_Picture_3.png, Price amp; Time: The Turn Window in USD/JPY

Charts Created using Marketscope – Prepared by Kristian Kerr

AUD/USD failed for a second time on Wednesday during a Fibonacci time cycle turn window at the 1.0500 78.6% retracement of the year-to-date range

-Subsequent weakness below the 1.0390 1st square root progression from this week’s high has turned us negative

-Focus now on on a convergence of Gann and Fibonacci levels between 1.0365 and 1.0350 with weakness below needed to expose 1.0315

-Near-term focused cycles remain negative for a few more days

-Strength over the 2×1 Gann angle line from the year-to-date low at 1.0440 needed to turn us positive

Strategy: Looking to get short on strength over the next day or so against 1.0410 with a stop just over 1.0455.

USD/CAD:

PT_turn_windowusdjpy_body_Picture_2.png, Price amp; Time: The Turn Window in USD/JPY

Charts Created using Marketscope – Prepared by Kristian Kerr

USD/CAD rebounded sharply on Friday from the key 1.0120/40 Fibonacci/Gann confluence zone to trade to its highest level in two weeks

Strength over a myriad of retracements between 1.0170/85 has turned us positive on Funds

-A Gann level related to the year-to-date high at 1.0240 is the next level of interest with strength over this needed to prompt the next push higher

-Short-term focused time cycles analysis is positive for a few more days

-Only weakness under 1.0120 turns us negative on the pair

Strategy: Want to get long Funds at 1.0170 with a stop just under 1.0120.

Focus Chart of the Day: USD/JPY

PT_turn_windowusdjpy_body_Picture_1.png, Price amp; Time: The Turn Window in USD/JPY

The next few days are a Pi cycle turn window related to the 2011 low (17.2 months). Our idealized setup would have been to see further weakness leading into it as it would have afforded an opportunity to align with the broader uptrend. The market (as it tends to do) has surprised with USD/JPY erasing all off the weakness of the past three weeks in a little less than two trading days to record new multi-year highs. This risk now according to our cyclical methodology is that the pair can record some sort of high over the next few days. While last night’s move in JGBs confirms these markets can turn on a dime, the probability of a meaningful turn here looks slim going into the window. We say this because turn windows (especially related to Pi) tend to work best when the market is severely extended leading into them. USD/JPY is only on the second day of this move higher and isn’t really exhibiting signs of being overextended. We respect the methodology, however, and can’t completely rule out the possibility. Some sort of meaningful weakness will be needed to peak our interest, though. Some key levels to watch during this turn window are the 61.8% retracement of the 2008-2011 decline near 97.25 and the 127% extension of the March decline around 97.80. On the downside the Gann squares related to the February low at 96.60 and 95.60 could be important pivots. More on this if it unfolds.

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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