Analys från DailyFX
US Dollar at Risk, SPX 500 Testing with 10-Month Support
Talking Points
- US Dollar at Risk of Reversal Below Channel Resistance
- SP 500 Flirting with Key Trend Line Support Levels
- Gold Broke Lower as Expected, Support Seen Sub-1400
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US DOLLAR TECHNICAL ANALYSIS – Prices put in a Spinning Top candle below resistance at 10796, the intersection of the 23.6% Fibonacci expansion and the top of a falling channel set from early Jul. The setup warns a move lower may be ahead. A break below initial support at 10760 exposes downside objectives at 10693 and 10646. Alternatively, a reversal above resistance targets the 38.2% Fib at 10882.
Daily Chart – Created Using FXCM Marketscope 2.0
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SP 500 TECHNICAL ANALYSIS – Prices are testing a support region bracketed by a pair of trend lines set from the November 2012 swing bottom. Near-term resistance at this stage is at 1646.20, the intersection of the first layer of trend line support and the 23.6% Fibonacci retracement. A break above that exposes the 38.2% level at 1658.30. Secondary trend line support is now at 1630.40, with a move below that eyeing the August 28 low at 1626.60.
Daily Chart – Created Using FXCM Marketscope 2.0
GOLD TECHNICAL ANALYSIS – Prices turned lower as expected, taking out support at the bottom of a rising channel set from early August to expose the 23.6% Fibonacci retracement at 1373.79. A break below that aims for the 38.2% level at 1336.79. The channel bottom – now at 1411.45 – has been recast as near-term resistance.
Daily Chart – Created Using FXCM Marketscope 2.0
CRUDE OIL TECHNICAL ANALYSIS– Prices pulled back as expected after showing a Shooting Star candlestick. Sellers are testing resistance-turned-support at the top of a Triangle chart pattern (107.29) to challenge the 23.6% Fibonacci retracement at 105.93. A break below that targets the Triangle bottom at 103.99. Resistance is seen at the 110.00 figure, followed by the August 28 high at 112.21.
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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