Analys från DailyFX
Price & Time: EUR/USD Fails At Key Gann Resistance
Talking Points
- Next 24 hours an important near-term cyclical inflection point for EUR/USD
- USD/CHF holds key support zone
- USD/JPY probes 117.00
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Foreign Exchange Price Time at a Glance:
Price Time Analysis: USD/JPY
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/JPY briefly traded over 117.00 this morning before turning lower
- Our near-term trend bias is positive in the exchange rate while above 114.85
- A trendline connecting the August and early Septembr highs near 117.00 is interim resistance ahead of more important Gann/Fibonacci objectives at 117.40 and 118.00
- Early December is the next turn window of signficance
- A close below the 2nd square root relationship of the year’s high at 114.85 would turn us negative on USD/JPY
USD/JPY Strategy: Like the long side while over 114.85.
Price Time Analysis: USD/CHF
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/CHF fell to its lowest level in over two weeks earlier today before finding support ahead of the 2nd square root relationship of the year’s high in the .9540 area
- Our near-term trend bias is higher in USD/CHF while above .9540
- The October high near .9690 is interim resistance, but a move through .9740 is really required to signal that USD/CHF has resumed its broader trend
- A minor turn window is eyed today
- A close under the 2nd square root relationship of last week’s high at .9540 would turn us negative on the exchange rate
USD/CHF Strategy: Like the long side while over .9540.
Focus Chart of the Day: EUR/USD
From a near-term cyclical perspective the next day or so should prove important for EUR/USD and shed some light on direction. We have been looking for the euro to turn back down around this time and this morning’s failure in the rate from just under the 2nd square root relationship of the year’s low at 1.2580 bodes well for this view. Follow on weakness tomorrow under today’s low (whatever it proves to be) will be a strong sign that the downtrend is indeed resuming. This would then set the stage for a test of the year’s 1.2356 low. However, unexpected aggressive strength over 1.2580 after today would invalidate the near-term negative cyclical view and warn the current upside correction has at least a few more days to run.
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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.
— Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
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
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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