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Price & Time: USD/CHF Correction?

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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_CHF_Correction_body_Picture_4.png, Price amp; Time: USD/CHF Correction?

Charts Created using Marketscope – Prepared by Kristian Kerr

EUR/USD has been under steady downside pressure since breaking below the 1×1 Gann angle line of the year-to-date low last week

Our bias is lower, but close attention must be paid to 1.2845/60 as it marks a convergence of the 78.6% retracement of the year-to-date range and the 3×1 Gann angle line from the year’s low

-Weakness below this support zone is required to maintain the immediate downside tack

-Short-term time cycle studies suggest the end of the week could see a minor turn materialize in the pair

-The 1.2900 area is immediate resistance, but only back over the 1×1 Gann angle line of the year-to-date low now at near 1.3050 would undermine the near-term negative technical outlook.

Strategy: Like holding short positions in the Euro whilst under 1.3050.

AUD/USD:

PT_CHF_Correction_body_Picture_3.png, Price amp; Time: USD/CHF Correction?

Charts Created using Marketscope – Prepared by Kristian Kerr

AUD/USD remains under heavy downside pressure and touched its lowest level since last June on Thursday

-Our bias is still down in the exchange rate with the next big level of interest seen around .9790 to .9800

-This area marks a convergence of the 78.6% retracement of the June to September advance and the 161.8% projection of the April decline with a close below this support needed to expose .9700 and below

-Some scope for a minor turn to be seen around the end of the week using some near-term focused cyclical methods

-The .9890 square root progression level is now resistance and a move above this zone would setup a more important counter-trend move higher

Strategy: Like holding reduced Aussie short positions under .9890.

EUR/GBP:

PT_CHF_Correction_body_Picture_2.png, Price amp; Time: USD/CHF Correction?

Charts Created using Marketscope – Prepared by Kristian Kerr

EUR/GBP mas moved modestly higher since finding support at the 38% retracement of the July to February advance in the .8400 area

While below the 3rd square root progression of the year-to-date high in the .8530 area our bias remains lower in the cross

-The 4th square root progression of the year-to-date higher at .8435 is immediate support, but traction under .8400 is needed to signal the start of a more important move low

-Short-term focused time cycles suggest some strength could be seen into the first part of next week

-A close over .8530 is needed to undermine the negative technical structure and turn us positive on the cross

Strategy: Like selling against .8530 if we get there in the next few days.

Focus Chart of the Day: USD/CHF

PT_CHF_Correction_body_Picture_1.png, Price amp; Time: USD/CHF Correction?

How important was yesterday’s high in USD/CHF? As the chart above shows there is a clear Fibonacci time relationship between yesterday, the November high, the July high and the April 2011 peak. Further supporting the case for a top of some sort was the fact that the pair failed on Wednesday near the .9750 100% projection of the February to March advance (as measured from the April low) as it sets up a clear potential time/price square. Weakness under Wednesday’s .9640 low would signal the likely start of a more material correction lasting at least a few days, while traction over .9750 negates the negative implications of the burgeoning Fibonacci price/time relationship.

Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

To receive other reports from this author via e-mail, sign up to Kristian’s e-mail distribution list via this link.

To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter @KKerrFX

Need guidance managing risk on trades? Download the free Risk Management Indicator.

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

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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

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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