Analys från DailyFX
Weekly Price & Time: Euro Fails at Key Resistance
Talking Points
- Euro reverses sharply from key resistance zone
- USD/JPY close to breaking out of multi-month consolidation
- Gold nearing important support zone
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Weekly Foreign Exchange Price Time at a Glance:
Weekly Price Time Analysis: EUR/USD
Charts Created using Marketscope – Prepared by Kristian Kerr
- EUR/USD has come under aggressive downside pressure since failing last week at the 61.8% retracement of the 2011 to 2012 decline in the 1.3830 area
- A weekly close below the 2nd square root progression of the year’s high near 1.3595 will turn the broader downtrend to negative
- The 3rd square root progression of the year’s high at 1.3475 is a near-term downside pivot with weakness below needed to expose the 61.8% retracement of the September to October advance at 1.3380
- The middle of November and the first half of December look significant for the Euro from a longer-term cyclical perspective
- Back through 1.3715 needed to turn attention higher
Weekly EUR/USD Strategy: Now looking to sell the Euro into strength.
Weekly Price Time Analysis: USD/JPY
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/JPY remains near the middle of a multi-month contracting range
- A weekly close over 98.60 will shift our broader bias to positive in the exchange rate
- However, a move through the 61.8% retracement of the late September to early October decline near 99.00 is really needed to increase confidence that a break of the range is underway
- A fibonaci time relationship suggests a move out of the range is more likely here
- Weakness below 96.55 would re-invigorate downside prospects and pave the way for a decline over the remainder of the quarter
Weekly USD/JPY Strategy: Square here, but will buy a weekly close over 98.60.
Weekly Price Time Analysis: GOLD
Charts Created using Marketscope – Prepared by Kristian Kerr
- XAU/USD has come under steady pressure the past few days following last week’s failure near the 61.8% retracement of the August to October decline in the 1364 area
- Our broader trend bias is positive in the metal while above the 1×1 Gann angle line of the year’s closing low near 1275
- The 1364 level remains a clear upside hurdle and traction above is needed to signal a resumption of the uptrend
- A potentially important cycle turn window is seen next week
- Only a move below 1275 on a weekly closing basis would turn us negative on the metal
Weekly XAU/USD Strategy: Like buying into weakness over the next few days against 1275.
— 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 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
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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
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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
To be added to Christopher’s e-mail distribution list, please fill out this form
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