Analys från DailyFX
Price & Time: Break of Multi-Month Consolidation Eyed in USD/JPY
Talking Points
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Focus Chart of the Day: USD/JPY
We will be closely monitoring USD/JPY over the next few days as our cyclical analysis suggests the exchange rate may try to breakout (or down) from the contracting range that has dominated trading since the latter half of May. A simple 61.8% Fibonacci time retracement of the advance off the 3Q12 low to this year’s high will be later this week (trading days). Given there is no real discernable trend leading into this “turn” window a move out of the range during this timeframe looks like the more probable scenario. A break of recent daily swing points at 99.00 or 96.55 would be initial evidence of such an occurrence.
Foreign Exchange Price Time at a Glance:
Price Time Analysis: EUR/USD
Charts Created using Marketscope – Prepared by Kristian Kerr
- EUR/USD traded to a new year-to-date high on Tuesday before encountering resistance just below the measured move of the July to August advance at 1.3800
- Our near-term trend bias is positive on the Euro while over 1.3655
- The 1.3800 measured move is resistance, but the real upside attraction is likely the 61.8% retracement of the 2011 to 2012 decline in the 1.3830 area
- The second half of the week is potentially important turn window in the exchange rate
- A daily close under the 8th square root progression of the year’s low at 1.3655 would turn us negative on the Euro
EUR/USD Strategy: Reduced longs favored while over 1.3655.
Price Time Analysis: AUD/USD
Charts Created using Marketscope – Prepared by Kristian Kerr
- AUD/USD traded to its highest level since early June before reversing sharply during the mid-week cycle turn window
- Our near-term trend bias is now lower and will remain so while below .9755
- The 8th square root progression of the year’s low at .9600 is immediate support with traction below exposing more important downside attractions at .9555
- A minor cycle turn window is seen early next week
- Any strength back through today’s high of .9755 would shift the trend bias back to positive in the Aussie
AUD/USD Strategy: Now square and looking to get short.
Price Time Analysis: GOLD
Charts Created using Marketscope – Prepared by Kristian Kerr
- XAU/USD has moved steadily higher since finding support during last week’s turn window from just under the 1×1 Gann angle line of the year’s closing low
- Tuesday’s close over the the 1322 2nd square root progression of last week’s low has shifted the near-term trend bias back to positive in the metal
- The 1×2 Gann angle line of the August high at 1338 is clear resistance with a daily close above this level now needed to prompt further upside
- A minor cycle turn window is seen later this week
- Weakness under the 1×1 Gann angle line of the year’s closing low now at 1268 would turn us negative on the metal
XAU/USD Strategy: Looking to buy on weakness.
— Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
Looking for a way to pinpoint sentiment extremes 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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