Analys från DailyFX

Gold Prices Fall Through Confluent Support Ahead of FOMC

Published

7 år ago

26 juli, 2017

DailyFX

Talking Points:

– Gold Prices have posed a bullish move over the past two weeks after oversold conditions began to flash.

– A key zone of support around $1,250 was unable to hold the lows, and this can open the door to short-side strategies.

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In our last article, we looked at the bullish move in Gold prices after oversold conditions began to flash in the early portion of July. That downtrend in Gold lasted more than a month and saw more than $90 leave the market; but after support showed up around the $1,205 level, buyers began to take control and prices moved-higher in a relatively consistent channel, creating a bear flag formation as we can see on the chart below:

Gold: Four-Hour Chart, Bear Flag Formation Shown with Blue Trend-Channel

Chart prepared by James Stanley

As we also discussed in our last article, the price zone around $1,250 is crucial to near-term price action in Gold. Within a $2-range on the chart, we have three Fibonacci retracement levels from three relevant major moves. At $1,250.35 we have the 50% retracement of the most recent bearish move, taking the June high down to the July low. At $1,249.98, we have the 50% retracement of the July-December, 2016 major move, and at $1,249.60, we have the 38.2% retracement of the December 2015 – July 2016 major move.

Perhaps more importantly, this confluent zone of support has offered numerous inflections and swings for recent price action in Gold, including helping to set swing support on the night of Brexit.

Gold Daily Chart: Confluent Support Zone Around $1,250 Emphasized

Chart prepared by James Stanley

To make matters more interesting, the bearish move that drove Gold prices-lower through most of June and into July was also happening as the U.S. Dollar was selling-off. Gold prices began to rise around July 10th, which is right around the time that the Greenback went into freefall mode ahead of Janet Yellen’s Humphrey Hawkins testimony. But over the past 24 hours, we’ve started to see a bit of strength develop in the Dollar, and as we wrote yesterday, that market is extremely oversold. As that strength has started to show in USD, Gold prices have tilted-lower, unable to hold support at this confluent zone around the $1,250-zone.

Gold: Hourly, Support Zone around $1,250 Unable to Hold the Lows

Chart prepared by James Stanley

Given this break of support, the door can be opened to short-side plays for aggressive strategies. Traders can look for stop placement at resistance swings around $1,255 or $1,259. Targets for aggressive strategies can look towards prior support zones of $1,241, $1,236 and then $1,226. For traders looking to treat Gold a bit more conservatively, they can await a break below this bullish trend channel as further evidence that the bear flag will give way.

— 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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