Analys från DailyFX
Price & Time: Gold Nearing a Critical Inflection Point
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.
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Foreign Exchange Price Time at a Glance:
USD/CHF:
Charts Created using Marketscope – Prepared by Kristian Kerr
–USD/CHF continues to meander around the 3×1 Gann angle line of the year-to-date low in the .9185 area
–Our bias is lower in the exchange rate while below the .9320 2nd square root progression of the last week’s low
– The 7th square root progression of the year-to-date high at .9145 remains a key downside pivot with weakness below needed to signal that another move lower is underway
-Long-term cycles suggest a low of some importance should be seen this week
-Only a close over .9320 would signal that a shift in trend is underway
Strategy: Reduced short positions favored while below .9320.
NZD/USD:
Charts Created using Marketscope – Prepared by Kristian Kerr
–NZD/USD has come under pressure over the past few days following last week’s failure at the 6th square root progression of the year-to-high in the .8130 area
-While over .7940 our bias remains higher in the Kiwi
-A convergence of the 1×1 Gann angle line and the 6th square root progression of the year’s high at .8125 is now a clear upside pivot with a close above needed to confirm the start of a more signficant upside push
-A near-term cycle turn window is seen on Thrusday
-Only a close below .7940 would undermine the burgeoning positive technical structure and turn us negative
Strategy: Like holding long positions against .7940.
EUR/GBP:
Charts Created using Marketscope – Prepared by Kristian Kerr
–EUR/GBP closed above the .8345 3×1 Gann angle line of the year-to-date high on Tuesday
-This puts the crossrate in a postive position and our bias is higher
-The 78.6% retracement of the late April decline at .8585 remains a key upside pivot with strength above needed to prompt a more important move higher towards .8625 and above
-Immediate support is seen at .8530
-However, only weakness below the long-term retracement at .8490 undermines the positive technical outlook and turns us negative on Euro-Sterling
Strategy: Like holding long positions against .8490.
Focus Chart of the Day: Gold
The end of this week and the start of the next looks extremely important for Gold from a cyclical perspective. Given how strong the trend leading into this turn window has been in a broader sense; a low of some sort materializing during this time remains our favored scenario. The extreme low reading in the Daily Sentiment Index (DSI) of just 11% bulls seems to further support this view. Ideally such a move would come from around the April lows in the 1320 area (or below), but such action is not required. If we are correct about a cyclical low then a multi-week to multi-month move higher should develop. Occasionally cyclical turn windows like the one seen between June 20-25 can lead to an acceleration in trend and with the metal trading in a narrowing range for the past two months this scenario cannot be completely ruled out. However, given the extreme low readings in sentiment this scenario looks unlikely.
— Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
Looking for a way to pinpoint sentiment extremes in the Gold in real time? Try the Speculative Sentiment Index.
To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter @KKerrFX
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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