Analys från DailyFX

A Nimble Trend Trade in AUD/NZD

Published

10 år ago

14 februari, 2014

DailyFX

Talking Points:

Clear Weekly Downtrend Still Intact
A ”Key Resolution” Point for AUD/NZD
Narrow Resistance Zone for Initiating New Shorts

The long set-up we targeted yesterday in AUDNZD did not materialize after the pair showed surprising strength, rallying upwards before even touching the desired support zone. However, while this may invalidate that trade set-up, it in fact gives rise to a new one.

Before examining today’s set-up, it is worth noting that the market environment appears to have shifted again. Readers will undoubtedly have noticed that since late-January, markets have started to move out of sync again, with several recent trades not triggering. We’ve been here before, and good markets often give way to touch-and-go phases like this. Moreover, it’s anybody’s guess how long it will last.

For now, it’s actually good that the changing rhythm is mostly resulting in missed trades rather than losing ones. While it is not quite time to play strict defense, traders should be more wary. Moreover, now is certainly not the time to be increasing position sizes.

Today, we’ll focus on the continuation of the trade from yesterday, which is now aligning back with the higher-order trends.

On the below weekly chart of AUDNZD, we see that the downtrend is obviously still intact, although price is admittedly some ways from resistance at this point.

Guest Commentary: Accelerating AUD/NZD Weekly Downtrend

Nonetheless, a trend trade would be permissible as long as there was a clear potential turning point on a lower time frame.

The daily chart below shows price heading up towards a resolution point where it may break out of the narrow declining channel, in which case the bias would be for AUDNZD to retrace and test the declining line of resistance. Alternatively, price may respect the channel and head lower. Newer traders instinctively dislike this kind of uncertainty, but it is actually this very conflict that creates the potential for a viable trade.

Guest Commentary: ”Resolution Point” on AUD/NZD Daily Chart

Ultimately, since no one has a crystal ball, the best course of action is still to take the trades that are being presented. Yesterday, the most compelling set-up for AUDNZD was to the upside, and now, the closest resistance is to the upside, making a short set-up more preferable today.

The below four-hour chart readily provides a zone of resistance based on the declining channel. An estimate of the area where the declining resistance meets price’s upside momentum has been outlined, giving resistance as 1.0806-1.0838.

Guest Commentary: Shorting AUD/NZD at Key Resistance

The highlighted area would be the ideal location for short positions taken on the hourly chart (not shown). The usual trade triggers, including bearish reversal divergence, bearish engulfing patterns, and/or pin bars would be used.

The risk zone for this set-up is a mere 32 pips deep, and given that each set-up will likely offer even smaller risk, it is more than acceptable for a trade that has more than 140 pips to move, even if it only reaches the bottom of this small channel. (Moreover, the previous daily low is approximately 300 pips from the current price). That said, two or three attempts should be made to get onto this move.

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

Follow our recent track record on the Straight Talk Trading Blog.

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

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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.

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

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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