Analys från DailyFX
Price & Time: Dollar Pause
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:
Charts Created using Marketscope – Prepared by Kristian Kerr
–EUR/USD came under further downside pressure on Friday and touched its lowest level since early April
–Our bias remains lower in the exchange rate with immediate focus on the 61.8% retracement of the April to May advance in the 1.2930 area
-A break below this level exposes 1.2880 and below
-Scope for a minor time cycle low seen on Tuesday and at the end of the week
-The 50% retracement of the decline from last month’s high near 1.3090 is now key resistance with strength above required to turn us positive on the exchange rate
Strategy: Continue to like short Euro position whilst below 1.3090
USD/CAD:
Charts Created using Marketscope – Prepared by Kristian Kerr
–USD/CAD found support last week at the Fibonacci/Gann confluence zone in the 1.0015/35 area
-Subsequent strength through the 1×1 Gann angle line of the year-to-date high has turned us positive on Funds
-Focus now is on the 2nd square root progression of the year-to-date high in the 1.0140 area with strength above needed to further confim the integrity of the latest move higher
-Near-term focused time cycle analysis suggest the middle of the week could see a minor turn in the pair
-The 1×1 Gann angle line in the 1.0080 are is now immediate support, but only weakness under 1.0015 undermines the postive technical structure in the rate and shifts bias back to lower
Strategy: We like holding longs in Funds whilst above 1.0015
USD/CHF:
Charts Created using Marketscope – Prepared by Kristian Kerr
–USD/CHF surged late last week and traded to its highest level since August of last year
–Our bias remains higher in the exchange rate with immediate attention on the 3×1 Gann angle line of the 2012 high in the.9630 area
-This resistance level capped the rate last week and a clear break above is needed to maintain the upside tack and expose .9670 and above
-Time cycles suggest scope for a minor turn on Tuesday and late this week
-The 1st square root progression of last week’s high in the .9630 are is immediate support, however, only weakness below the 2nd square root progression at .9430 would turn us negative on USD/CHF.
Strategy: Favor the long side in USD/CHF whilst over .9430.
Focus Chart of the Day: SP 500
Last week was significant from a time cycle perspective for a variety of FX markets including the Euro, Gold in USD terms, Cable and EUR/JPY. The latter half of the week also looks relevant for US equities as a simple bar count on the daily chart reveals a burgeoning Fibonacci relationship. Weakness below Friday’s low will confirm a top of some sort and setup at least a minor short-term correction. A move through Thursday’s high eliminates this possibility. Given the importance of the late April trun window for US equities from a cycle perspective and the fact that indices were able to push so easily through this “time resistance” suggests stocks have more to go in a medium-term sense with the second half of June the next cyclical time resistance of note.
— Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
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To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter @KKerrFX
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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
—Written by Paul Robinson, Market Analyst
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You can follow Paul on Twitter at@PaulRobinonFX.
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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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