Analys från DailyFX
DAX Intriguing, CAC 40 Even More-so; Watch for a Monthly Close Above 16 ½ Year Trend-line
What’s inside:
- DAX possible RST forming at April ’16 trend-line
- CAC 40 working on a weekly/monthly close above trend-line extending down from the 2000 peak
- Important levels outlined
Join us for webinars conducted daily covering a host of topics including analysis, education, and coverage of fundamental events. See the Webinar Calendar for details.
On Monday, we discussed the DAX and CAC and how they were in the process of negating bearish price sequences, and that the price swings this month were taking on the form of a consolidation making the market look more bull than bear. Both indices subsequently broke out to new highs; Bulls 1, Bears 0.
The DAX is trading at the underbelly of two trend-lines (April ‘16/December), which given the confluence may present as problematic. However, they aren’t considered major resistance given they are running in the same direction as the market. Unless…
We also have a price sequence at hand which could lead to a sharp move in either direction. A reverse symmetrical triangle (RST) or ‘megaphone’ pattern is in the works. These can be reversal or continuation patterns. The increasing price swings of higher highs and lower lows which make up the expanding triangle indicate growing indecision in the marketplace. If it is to resolve itself to the upside a pullback is likely first, then a hold of that dip and up we go. If it is to become a top, the initial down-move may start to turn back higher only to fail below any short-term swing-low which is formed. Or, the market may all-together not even bother with pulling back, but if it does then we’ll be watching for the beforementioned price action for indications as to what the pattern may portend.
On further strength, there is a trend-line running higher from August to watch around 12300, but the big level to keep an eye on is the 2015 record high of 12391. Near-term support comes in at the prior peak of 12156.
DAX: Daily
Created with TradingView
Despite its correlation to the DAX, the CAC isn’t carving out the same RST pattern. But it could be doing something which is even more interesting. It’s early, with still the rest of today and tomorrow before the week and month are in the books, but a strong weekly/monthly close above the trend-line running down from the 2000 highs could be a rather significant event. If the CAC is to rip on a big breakout, then the DAX isn’t going to get left behind, only perhaps in magnitude. On a confirmed breakout, the first notable levels of resistance arrive at 5217 and then 5283.
CAC40: Monthly
Created with TradingView
Looking for trading ideas? See our Trading Guides.
—Written by Paul Robinson, Market Analyst
You can receive Paul’s analysis directly via email by signing up here.
You can follow Paul on Twitter at @PaulRobinonFX.
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
Confidence is essential to successful trading, see this new guide – ’Building Confidence in Trading’.
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
- OPEC+ in a process of retaking market share
- Manufacturing PMIs ticking higher lends support to both copper and oil
- Crude stocks fall again – diesel tightness persists
- Increasing risk that OPEC+ will unwind the last 1.65 mb/d of cuts when they meet on 7 September
- Brent edges higher as India–Russia oil trade draws U.S. ire and Powell takes the stage at Jackson Hole
-
Analys från DailyFX10 år ago
EUR/USD Flirts with Monthly Close Under 30 Year Trendline
-
Marknadsnyheter5 år ago
BrainCool AB (publ): erhåller bidrag (grant) om 0,9 MSEK från Vinnova för bolagets projekt inom behandling av covid-19 patienter med hög feber
-
Marknadsnyheter3 år agoUpptäck de bästa verktygen för att analysera Bitcoin!
-
Analys från DailyFX12 år ago
Japanese Yen Breakout or Fakeout? ZAR/JPY May Provide the Answer
-
Marknadsnyheter2 år agoDärför föredrar svenska spelare att spela via mobiltelefonen
-
Analys från DailyFX12 år ago
Price & Time: Key Levels to Watch in the Aftermath of NFP
-
Analys från DailyFX8 år ago
Gold Prices Falter at Resistance: Is the Bullish Run Finished?
-
Nyheter7 år agoTeknisk analys med Martin Hallström och Nils Brobacke