Analys från DailyFX
S&P 500: Sluggish, but Supported; Nasdaq 100 Pushes to New Highs
What’s inside:
- The SP 500 moves higher, albeit in sluggish fashion
- Noted 2150 level overcome, brings top-side trend-line into focus
- Overall, appetite for stocks is supportive, for now
The SP 500 continues its sluggish ways, unable to gain significant traction on either side of the tape. In Friday’s post we had this to say, “A clean break above 2150 will put ball in the bulls’ court, bringing the trend-line off the 9/7 high into focus…” Yesterday brought a move over 2150 on a closing daily basis. While it wasn’t the most convincing move, we will operate off the region in the mid-2140s to 2150 as support now that it has been overcome.
In the short-run, maintaining 2145/50 will bring the trend-line off the 9/7 swing high into focus as the next line of resistance (~2160). Beyond there, we will look to several inflection points along the trend-line as resistance – 2170, 2175, 2179, and 2188.
If the market is incapable of holding onto the 2145/50 zone, it’s not far below that the trend-line off the 10/13 swing low will come into play as support around 2140. A break of this trend-line will put pressure again on the daily trend-line off the Feb 11 low; bringing into focus 2130, 2124, and the important daily swing low at 2115.
SP 500: Hourly
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At this time risk sentiment is generally supportive for higher prices, with the Nasdaq 100 reaching new record highs yesterday, while globally the Nikkei moves to 6-month highs and the DAX trades to new yearly highs. But these markets moving to new heights also highlights the laggard status the SP 500 maintains and a potential fracturing in broad market strength. If risk appetite were to sour, look for the SP to be one of the first to take a hit, and given its broad nature act as a potential sign of bigger problems ahead. However, for now, the market has support as it tight-ropes the Feb 11 trend-line and risk sentiment continues to be modestly positive, so the path of least resistance, as sluggish as it may be, is up at the moment. (Keep an eye on how the market reacts at the top-side trend-line should the SP soon approach.)
SP 500: Daily
Created with Tradingview
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—Written by Paul Robinson, Market Analyst
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You can follow Paul on Twitter at @PaulRobinonFX.
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
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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