Analys från DailyFX

EURUSD Backing-and-Filling, ’Bull-flag’ Coming into View

Published

7 år ago

19 augusti, 2017

DailyFX

What’s inside:

EURUSD chopping lower in constructive fashion, building a ‘bull-flag’
Probe of confluent support could mark the end of the correction
On a bull-flag breakout, the US Dollar Index (DXY) to probe deeper into long-term support

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Last week, trading in EURUSD was dominated by choppy back-n-forth price action. On three different days the euro traded below the prior week’s low of 11689, and each time it rejected lower prices and closed the session with a bounce. Overall, since topping out around the 2010 low near 11900 the euro has been constructively working off overbought conditions. This is viewed as a positive for the intermediate-term outlook, but still holds a bearish tilt in the very short-term. While the current configuration could be considered a valid ‘bull-flag’, some more chop within the confines of the descending channel (‘bull-flag’) will do some good in terms of building a stronger, more mature pattern. A drop to the April trend-line and lower parallel near the 2016 high of 11616 would make for a good final test of confluent support within the bullish sequence. In the event we see a breakout above the upper parallel, focus will quickly shift towards 11910 and a higher high towards the 2012 low at 12041, and possibly higher.

EURUSD: Daily

Turning focus to the US Dollar Index (of which the euro holds a ~57% weighting), the DXY is trading in a major long-term zone of support. It’s towards the upper end of this zone, so a probe even deeper into support would be the outcome on another surge in the euro. The dollar has few backers these days, with bearishness clearly escalating to a point where the scale may soon tip in favor of a reversal. The one-sided trade into major long-term support could soon present a material, tradeable low in the not-too-distant future. This of course means the euro will get turned upside down and set in motion a decline unlike anything we’ve seen in recent months.

US Dollar Index (DXY): Monthly

The bottom line for this coming week – EURUSD looks poised to continue choppy-trade with a slightly bearish bias within the confines of the channel, perhaps only providing the nimble short-term trader with opportunities to fade minor price swings. However, in the event we see a firm break above the upper parallel of the maturing bull-flag, the end of the correction will likely be over and another (possibly final) surge higher for the single-currency could be in store. To undermine this outlook, it would require a breakdown below the before-noted support surrounding 11600. At that juncture, a broader rebound in the US dollar will likely be in the works.

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—Written by Paul Robinson, Market Analyst

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You can follow Paul on Twitter at@PaulRobinonFX.

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

You can receive Paul’s analysis directly via email bysigning up here.

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

To be added to Christopher’s e-mail distribution list, please fill out this form