Analys från DailyFX
Trading Opportunities in Euro Crosses at Nearby Levels
- USDJPY enters breakout window on Monday
- USDOLLAR observations similar to September 2012
- Euro cross rates are set up for long term bullish resumption
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Daily
Chart Prepared by Jamie Saettele, CMT
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-USDJPY ends the week on the lows and below the trendline that originated from the August low. Weakness below 97.75, the 9/18 low and trendline that originates from the June low, would indicate bearish resolution from the 3 month triangle (from June). Holding above 97.75 and trading through 100.60 would indicate bullish resolution.
-The most reliable breakout candidates occur no sooner than 2/3rds and no later than 3/4ths of the way through the triangle. This window is Sep 30th to Oct 11th. The window begins on Monday.
-If price breaks down early next week, beware of support from the 8/28 low and 61.8% retracement of the advance from the June low at 96.70/80.
Trading Strategy: Am still long from 98.80 with a 97.75 stop. There is an AUDJPY short setup.
USDOLLAR
Weekly
Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0
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–Since the 2011 low, USDOLLAR has not dropped for more than 4 consecutive weeks. Price has dropped for 4 weeks.
-Last week’s decline after the Fed announced ‘no taper’ feels, looks, and smells like the QE3 announcement in September 2012. In both instances, daily RSI(21) dropped to nearly the exact same level and price formed an inside week the next week. Both declines even formed channels, albeit in different ways.
Weekly
Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0
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-EURGBP rallied in an impulsive manner from the July 2012 low after declining in a corrective manner for 3 and a half years.
-The rally from 7/23/12 to 2/25/13 took 155 trading days. 155 trading days from 2/25/13 is on Monday. In other words, the current sideways trend will equal the previous bull trend in time on Monday.
-Price has formed a slightly downward sloping parallel (and corrective) channel since the February high. Price has traded ‘around’ the line that extends off of the 2008 and 2011 highs. The multiple false breakouts may help inspire a real breakout.
Trading Strategy: Looking for a low on Monday or Tuesday.
Daily
Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0
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-An ending diagonal (wedge) formed from the March 2011 high to the August 2012 low. Diagonals are often fully retraced, therefore the objective is the origin of the diagonal at 1.9564.
-An inverse head(s) and shoulders may be forming since February 2012. The pattern is slightly upward sloping, making it especially (potentially) powerful (see a completed version on EURAUD below). Exceeding 1.7274 would complete the pattern. Incidentally, the measured objective would be just pips from the origin of the mentioned diagonal.
-Price has retraced slightly over half of the advance from the April low, finding low on Sep 19th. The decline into the 19th may actually complete a flat correction from the June high (a-b-c).
Trading Strategy: Looking for a low between 1.6150 and 1.6220 next week.
Daily
Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0
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-EURAUD is a bit ahead of EURNZD, having completed an inverse head and shoulders pattern on the May breakout. Price exceeded the measured objective before pulling back from above 1.5000 to below 1.4200 and finding low on the Sep 18th.
-The average plotted is 63 days (roughly 3 months). When price broke down from consolidation in 2009, price spikes above this average indicated opportunities to align with the downtrend. Price has sharply rebounded after spiking below the same average, perhaps indicating an opportunity to align with the larger uptrend.
Trading Strategy: Looking for 1.4460/80 support in order to get long against 1.4380.
— Written by Jamie Saettele, CMT, Senior Technical Strategist for DailyFX.com
To contact Jamie e-mail jsaettele@dailyfx.com. Follow him on Twitter @JamieSaettele
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
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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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