Analys från DailyFX
Technical Weekly: GBP/USD Making an 8 Year Low?
- EUR/USD holding up after weekly key reversal
- Outside bullish weeks in GBP/USD and USD/CAD
- Good levels coming up for AUD/USD and NZD/USD
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EUR/USD
Weekly
Chart Prepared by Jamie Saettele, CMT
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“I don’t see how it’s smooth sailing to the downside…EUR/USD continues to trade on a long term parallel and the weekly wicks (key reversal this week) denote active support. I don’t like being a bear in the face of active support at a well-defined parallel.” Support held and the first test for this rally is 1.0820 (former lows and a parallel) and then 1.0912 (Brexit low) and 31 year trendline. Pay attention to weekly RSI. The fact that the indicator has turned up from above 30 is a positive but pay attention to the 60 value for resistance.
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GBP/USD
Weekly
Chart Prepared by Jamie Saettele, CMT
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Did the 96 month (8 year) cycle low count just nail a major GBP/USD low (cycle is in February but give this some wiggle room)? This week’s bullish outside week is a good start. Still, Cable is testing an important level in the form of the 13 week average, which tends to provide support/resistance during trends. Price is still below and a push above would be viewed as a positive, especially in light of the mentioned bullish week. The former floor in the 1.3500-1.3700 zone could come into play at some point although the first test would be 1.2800.
AUD/USD
Weekly
Chart Prepared by Jamie Saettele, CMT
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I’m viewing Aussie strength YTD as a harbinger of things to come. There will be 2 way action of course and the .7700 area could influence for a pause. Prior comments remain valid. “AUD/USD sports good looking symmetry with respect to the time between major lows. It’s one reason that I like the idea of the 2016 low at .6847 holding. The other reason to get bullish in the event of constructive price action on the daily or weekly charts is the relationship between the 2011 high and 2016 low. The .618 absolute retracement of the 2011 high at 1.1080 is .6847 (1.1080 x .618). The 2016 low is .6827.”
NZD/USD
Weekly
Chart Prepared by Jamie Saettele, CMT
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“The re-test, head and shoulders, and rally from 2015 as a wedge is so textbook it scares me.” It was right to be scared! At this point, the head and shoulders pattern is considered failed but pay attention to the underside of the 2016 trendline for resistance. The line is just above the December high of .7239.
USD/JPY
Weekly
Chart Prepared by Jamie Saettele, CMT
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The last USD/JPY note remarked that “USD/JPY may be at or near the end of the first leg of the next bull cycle just as October 1990 was the first leg of the next bear cycle.” USD/JPY has indeed turned lower but could stabilize now that the 13 week average has held. Even so, the strength of the prior trend probably necessitates a more drawn out corrective process. In the event of a break, 109 would be in play.
USD/CAD
Weekly
Chart Prepared by Jamie Saettele, CMT
See REAL TIME trader positioning
USD/CAD made a mess of the May-August trendline and triggered a bear trap in the process. Connect the May and November highs and extend a parallel off of the May low to work with the new channel. The overlapping (corrective) nature of the advance from May keeps me from turning bullish on the outside week. Best to wait for clarity regarding Loonie.
USD/CHF
Weekly (LOG)
Chart Prepared by Jamie Saettele, CMT
See REAL TIME trader positioning
Since trading to a 6+ year high, USD/CHF has slowly declined. Broad upside potential is possible as long as price is above the 2011-2014 trendline. The trendline is near .9850 on log scale and just above .9700 on arithmetic. The topside of the wedge is worth knowing near 1.0450 (line off of 2012 and 2015 highs). Essentially, the wedge barriers are all I care about…all else is noise.
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
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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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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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