Analys från DailyFX

US Dollar Bounces, But Bulls Lack Boldness To Hold Exposure

Published

7 år ago

10 augusti, 2017

DailyFX

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Talking Points:

DXY Technical Strategy: DXY remains in “sell the rips” mode below 95.47
DXY polarity point of 96.50 remains technical line in the sand, bearish below
Dollar short covering after July NFP dissipates as JPY strength becomes new focus
IG Client Sentiment Highlight: EUR (57.6% of DXY) sentiment stalls – next move key

The downward momentum for the US Dollar has wobbled but overall remains on a course that anticipates further weakness. From a fundamental perspective, we heard recently from Federal Reserve Bank of New York President Bill Dudley who said that it would take some time for US inflation to rise to 2%, especially on a year-on-year basis. While he blamed the effect on one-offs from months that will take a while to fall out of the year-on-year readings, there appears to be little reason to anticipate the Fed would turn to a surprisingly hawkish stance that would lift the USD out of its 2017 downtrend.

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Last month, the key focus of USD weakness was EUR and commodity currency strength, which took EUR/USD above 1.19 and USD/CAD below 1.25. In August, so far, it appears that the Japanese Yen is the focal currency, which has recently traded toward 109 and is close to the lowest level since mid-June of 109.27. A break below 108.13, YTD low of USD/JPY, would argue that the common denominator of larger moves in FX this year has been a rather weak USD, which show few credible signs of turning.

When looking at charts across the board, it does not appear that USD is the blind sell that it once was due to emerging weakness in NZD, GBP, CHF. However, when stronger currencies emerge, the US dollar appears little resistance for further gains.

Looking at the chart below, you can see that the price of the US Dollar Index remains in a strong downtrend. The price continues to run down the bottom half of the price channel with current resistance near 94.08, which is last August’s low as well as the opening price for the week of the Brexit vote in late June ’16. On the chart below, you can see that Dollar Bulls fail to hold their positions as shown by the upside wicks and closes near the day’s low. Only a close above 94.08 would turn the current trading bias from bearish to neutral.

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DXY below 96.50 keeps thefocus on downside extension targets @ 92.03, EUR/USD 1.16

Chart Created by Tyler Yell, CMT

IG Client Sentiment Highlight: EUR (57.6% of DXY) Sentiment Stalls – Next Move Key

EURUSD: Retail trader data shows 28.6% of traders are net-long with the ratio of traders short to long at 2.5 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.06524; theprice has moved 10.6% higher since then. The number of traders net-long is 16.3% higher than yesterday and 22.9% higher from last week, while the number of traders net-short is 16.4% higher than yesterday and 0.9% higher 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. (Emphasis mine)

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Written by Tyler Yell, CMT, Currency Analyst Trading Instructor 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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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

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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.

— 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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