Analys från DailyFX
Price & Time: Important Break in Gold?
Talking Points
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Focus Chart of the Day: GOLD
XAU/USD finally closed below the 1×1 Gann angle line of the year’s closing low at 1277 yesterday. This Gann level had been acting as important support and actually repelled the decline last month. Tuesday’s technical break is thus probably significant and increases the risk of further losses especially with a very mature topping pattern looming overhead on the daily and weekly charts. Gann support at 1243/48 is now a critical pivot with a move below likely exposing the year’s low. The cyclical picture is quite muddled with all the choppy price action of the past few months, though the middle of next week looks like a potentially important cyclical turn window. A move today back over 1277 would raise concern of a false break, but traction over 1322 is really needed alleviate the immediate negative tone.
Foreign Exchange Price Time at a Glance:
Price Time Analysis: USD/JPY
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/JPY probed above the 4th square root progression of the year’s high at 99.60 on Tuesday
- Our near-term trend bias is higher in the exchange rate while above 97.55
- A daily close over 99.60 is now critical in confirming a breakout from the multi-month contracting range
- The first and latter half of next week are cycle turn windows in USD/JPY
- A move under the 6th square root progression of the year’s high at 97.55 would turn us negative on the rate
USD/JPY Strategy: Like the long side while over 97.55
Price Time Analysis: AUD/USD
Charts Created using Marketscope – Prepared by Kristian Kerr
- AUD/USD has come under aggressive downside pressure since last month’s failure at the 200-day moving average
- Our near-term trend bias is lower in Aussie while below .9420
- Gann support between .9260 and .9220 is a critical action/reaction zone
- The second half of the week is a potentially important cycle turn window
- A move back over .9420 would turn us positive in the Aussie
AUD/USD Strategy: Like reducing short exposure into the cycle turn window.
Price Time Analysis: GBP/USD
Charts Created using Marketscope – Prepared by Kristian Kerr
- GBP/USD traded to its lowest level since mid-September on Tuesday
- Our near-term trend bias is lower in Cable while below 1.6055
- The 9th square root progression of the year’s low at 1.5895 is important support and a daily close below this level is needed to signal a resumption of the latest decline
- A medium-term cycle turn window is seen over the latter half of the week
- Back over the 50% retracement of the late October/November decline at 1.6055 would shift our trend bias back to positive
GBP/USD Strategy: Like reducing short positons into this turn window.
— 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
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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