Analys från DailyFX
Dollar Treading Water Before FOMC Minutes as S&P 500 Corrects
THE TAKEAWAY: The US Dollar is trading sideways as traders await the outcome of Wednesday’s FOMC minutes release while the SP 500 has attempted a cautious recovery.
Don’t have access to the Dow Jones FXCM US Dollar Index? Try the USD basket via Mirror Trader as an alternative. **
US DOLLAR TECHNICAL ANALYSIS – Prices are treading water above support at 10650, the August 8 low. Near-term resistance is at 10708,the 23.6% Fibonacci expansion, with a break above that targeting the 38.2% level at 10744. Alternatively, a move below support eyes the bottom of a falling channel set from early July, now at 10598. Broadly speaking, the standstill likely reflects traders’ unwillingness to commit to a directional bias ahead of Wednesday’s FOMC minutes publication.
Daily Chart – Created Using FXCM Marketscope 2.0
** The Dow Jones FXCM US Dollar Index and the Mirror Trader USD basket are not the same product.
SP 500 TECHNICAL ANALYSIS – Prices declined as expected after putting in a Hanging Man candlestick. The index is now retesting support-turned-resistance at 1652.10, the 38.2% Fibonacci retracement, with a break back above this barrier exposing the 23.6% retracement at 1674.10. Alternative, renewed downward momentum sees the next downside objective is at 1634.30, the 50% level.
Daily Chart – Created Using FXCM Marketscope 2.0
GOLD TECHNICAL ANALYSIS – Prices put in a bearish Dark Cloud Cover candlestick pattern below resistance at 1376.28, the 61.8% Fibonacci expansion, hinting a reversal lower may be ahead. Negative RSI divergence bolsters the case for a downside scenario. Near-term support is at 1356.22, the 50% Fib, with a break beneath that targeting the 38.2% level at 1336.76. Alternatively, a reversal above 1376.28 aims for the 76.4% expansion at 1400.72.
Daily Chart – Created Using FXCM Marketscope 2.0
CRUDE OIL TECHNICAL ANALYSIS– Prices pulled back after putting in a Bearish Engulfing candlestick pattern below resistance at the top of a Triangle chart pattern, a barrier reinforced by the 38.2% Fibonacci expansion at 108.40. Sellers are now testing Triangle support at 104.71, with a break beneath that initially exposing the 38.2% Fib retracement at 102.70. Alternatively, a reversal above 108.40 aims for the 50% expansion at 110.32. On balance, a Triangle is typically indicative of trend continuation, which in this case carries bullish implications, though confirmation is absent for now.
Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for Dailyfx.com
To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak
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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.
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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.
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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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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