Analys från DailyFX

A Nimble Intraday Short in GBP/JPY

Published

11 år ago

12 maj, 2014

DailyFX

Talking Points:

Dual Lines of Resistance in Play for GBP/JPY
Key Zone for Initiating New Shorts
The Ideal Time Frame for Taking This Trade

Mondays of late tend to be characterized by rather lazy price action, and this Monday looks to be no different. However, traders might be able to pull off an intraday trade in GBPJPY should it retest the highs of the day.

The story begins on the four-hour chart below, where price is now rising to challenge two declining lines of resistance. Normally, one would respect the longer-term uptrend, but this has to be considered in light of two potentially mitigating factors:

There are dual lines of declining resistance in close proximity to each other; and…
Mondays tend to be mean reverting

Guest Commentary: GBP/JPY Testing Dual Lines of Resistance

In all, a somewhat countertrend trade could be considered, one that requires extremely defensive trade management.

The resistance zone is readily found using the space between these two lines of resistance, and while different traders will have drawn different trend lines with varying degrees of slope, most lines will fall within the highlighted zone on the below hourly chart. In addition, there are lines of previous horizontal support and resistance that lend further credence to these levels.

Guest Commentary: Key Zone for Initiating New GBP/JPY Shorts

The exact zone is 172.26-172.54. Price has already come up to test this area once, although this only provoked a lukewarm response from sellers thus far. Hence, it would be wiser to expect another upward push by the bulls before selling starts in earnest.

The ideal scenario would be for price to make a new high before entering on the 15-minute chart (see below). Triggers including bearish reversal divergence (preferred), bearish engulfing patterns, and/or pin bars would all serve as valid short-entry signals.

Should the trade work out, there could be 100 pips to be had as price heads down to retest the recent low. By comparison, the 28-pip risk zone seems small, and the 15-minute chart could likely produce even smaller risk.

A rough parallel channel can be seen on below the 15-minute chart. In situations of this sort, price is bouncing with approximately equal strength up and down, or at least it has been up to this point. By following the price action on the chart, one can see that a new downward push seems to be in the early stages right now. Thus, the most opportune place to enter would be if there is one last swipe to the high.

Guest Commentary: Shorting GBP/JPY on the 15-Minute Chart

Of course, this may not happen, and the trade may not mature. However, if it does, it could prove quite worthwhile. As always, traders should be prepared to enter two or three times in order to get in on the move.

Also, as this move is opposite in nature to the larger trend, there should be multiple positions taken in order to better control risk. For that very same reason, part of the position should be exited relatively quickly, while the remainder can be left to run if this turns out to be the beginning of a longer swing down.

By Kaye Lee, private fund trader and head trader consultant, StraightTalkTrading.com

Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

Published

7 år ago

30 september, 2017

DailyFX

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

Confidence is essential to successful trading, see this new guide – ’Building Confidence in Trading’.

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.

Analys från DailyFX

Euro Bias Mixed Heading into October, Q4’17

Published

7 år ago

29 september, 2017

DailyFX

Euro Bias Mixed Heading into October, Q4'17

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

Analys från DailyFX

British Pound Reversal Potential Persists Heading into New Quarter

Published

7 år ago

29 september, 2017

DailyFX

British Pound Reversal Potential Persists Heading into New Quarter

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