Analys från DailyFX
Price & Time: Where the Rubber Meets the Road
- Next couple of days are critical for the SP 500
- EUR/USD cycle turn window seen late this week
- AUD/USD in the midst of a more important bottoming process
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Foreign Exchange Price Time at a Glance:
Price Time Analysis: EUR/USD
Charts Created using Marketscope – Prepared by Kristian Kerr
- EUR/USD found support last week just ahead of the 50% retracement of the July to August advance in the 1.3100 area
- Subsequent strength has been impressive, but while below a convergence of several key Gann and Fibonacci levels near 1.3315 our near-term trend bias will remain lower
- Weakness back below 1.3220 and then 1.3100 is needed to signal a resumption of the near-term trend
- The latter half of the week is a clear medium-term cycle turn window in the Euro
- A close over 1.3315 would turn us much more positive on EUR/USD
EUR/USD Strategy: Like the short side while below 1.3315.
Price Time Analysis: AUD/USD
Charts Created using Marketscope – Prepared by Kristian Kerr
- AUD/USD traded to its highest level since late July early on Tuesday
- While over the 3rd square root progression of the year’ low at .9130 our near-term trend bias will remain higher in the exchange rate
- The 5th square root progression of the year-to-date low coincides with the July high near .9315 and close over this level will signal that broader bottoming process is taking place
- A minor turn window is seen around the end of the week
- Weakness back under .9130 would undermine the immediate positive tone in the rate
AUD/USD Strategy: Like the long side while over .9340
Price Time Analysis: GOLD
Charts Created using Marketscope – Prepared by Kristian Kerr
- XAU/USD has come under steady downside pressure since failing on a closing basis at the 7th square root progression of the year-to-date low in the 1418 area at the end of last month
- While above the 5th square root progression of the year’s low near 1350 our near-term trend bias will remain higher in the metal
- The 1418 Gann level remains an important upside pivot, but over 1440 is really required to confirm the start of another important leg higher
- A minor cycle turn window is seen today and at the end of the week
- Weakness below 1350 would undermine the immediate positive tone, but only weakness below 1280 turns the outlook negative on the metal
XAU/USD Strategy: Like the long side while over 1350
Focus Chart of the Day: SP 500
The next two days are important for the US equity markets. Seemingly with the impressive strength being exhibited in the indices over the past 36 hours all is well and a run at the all-time highs in the SPX has become for many all but a forgone conclusion in the days ahead. We are not so sure. An important cycle turn window exists over the next couple of days and with the SP 500 testing a key resistance zone (1680 to 1692) at the same time there is a good chance in our view that it will lead to secondary top and a much more tumultuous September/October. A daily close over 1700 or any sort of strength through 1710 would obviously prove our fears unjustified.
— Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
This publication attempts to further explore the concept that mass movements of human psychology, as represented by the financial markets, are subject to the mathematical laws of nature and through the use of various geometric, arithmetic, statistical and cyclical techniques a better understanding of markets and their corresponding movements can be achieved
Looking for a way to pinpoint sentiment extremes in the SPX in real time? Try the Speculative Sentiment Index.
To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter @KKerrFX
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.
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
To be added to Christopher’s e-mail distribution list, please fill out this form
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
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