Analys från DailyFX

GBP/USD Technical Analysis: The 300-Pip Box, post-Breakout

Published

7 år ago

7 juni, 2017

DailyFX

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Talking Points:

GBP/USD Technical Strategy: Working within 300-pip range between 1.2750-1.3050.
Cable price action has continued to respect support at prior range resistance, around the 1.2750 psychological level.
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In our last article, we looked at a quick support test of a pertinent level after the British Pound dropped on the heels of a Yougov poll around tomorrow’s election in the U.K. Tomorrow’s election, of course, was announced as an early general election by Prime Minister Theresa May in mid-April. At the time, the decision was widely-applauded as cogent political strategy as PM May could use the current backdrop in U.K. politics to secure a stronger majority for her Tory party which, could, give her contingent a stronger hand in Brexit negotiations with the EU. But last week’s poll indicated that Ms. May and the Tories may not have such a clean sweep in tomorrow’s election, and this prodded a quick dose of weakness into Sterling as anxiety drove a quick iteration of risk aversion.

Since then, we’ve seen Cable recover, albeit tenuously, as resistance has continued to show on the under-side of a previously bullish trend-line.

Chart prepared by James Stanley

While it might be very attractive to ‘play between the cracks’ ahead of tomorrow’s election, the fact of the matter is that we have what could be a really big driver coming to light tomorrow. This can produce wild, chaotic and volatile price movements as markets attempt to price-in this new information as it becomes known. And bigger picture, we’re near the middle of a 300-pip range that’s built-in after the April breakout in the pair. This can be a noisy time for setting up positions ahead of major event risk when there’s been a lack of discernible trend on shorter time frames.

Chart prepared by James Stanley

Moving forward, traders can use this ‘box’ to assist in setting up directional biases in the pair moving-forward. The widely-expected result is that a stronger Tory majority means more strength for the British Pound, and if this takes place we could see the 1.3050 level eventually yield to buying demand, at that point the door can be opened for bullish continuation strategies. If, on the other hand, the Tories put in a weaker showing, we could be looking at reversion to the prior range, sub-1.2750, and this can open the door to short-side continuation strategies.

While it may be appealing to use this 300-pip box as a breakout setup – please take caution. Whipsaw should during these types of events as market makers and banks will generally go more risk averse, which means less liquidity in major markets; and this can lead to even sharper moves than normal. This was very similar to what we saw during Brexit and again around the U.S. Presidential election. While tomorrow may not bring the same girth of volatility seen in either of those events, open orders and support and resistance levels become more vulnerable.

Chart prepared by James Stanley

— Written by James Stanley, Strategist for DailyFX.com

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Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

Published

7 år ago

30 september, 2017

DailyFX

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.

Analys från DailyFX

Euro Bias Mixed Heading into October, Q4’17

Published

7 år ago

29 september, 2017

DailyFX

Euro Bias Mixed Heading into October, Q4'17

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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Analys från DailyFX

British Pound Reversal Potential Persists Heading into New Quarter

Published

7 år ago

29 september, 2017

DailyFX

British Pound Reversal Potential Persists Heading into New Quarter

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

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