Analys från DailyFX

A Second-Chance Set-up in USD/SGD

Published

10 år ago

23 december, 2013

DailyFX

Talking Points:

Initial Long Entry That Just Missed
Consolidation Presents a Second Chance
Step-by-Step Parameters for Taking This Trade

Last week, we presented a trade idea to buy USDSGD before the Federal Open Market Committee (FOMC) policy decision. This trade was built on the premise that the currency pair was due for a sharp upswing post-FOMC. At the time, USDSGD was trading in the mid- to high-1.25 zone, and we projected a move to the high 1.26s or low 1.27s.

While the trade idea was stopped out by just a few pips, we did see USDSGD rise sharply to the high 1.26s. This move higher was in line with our pre-FOMC Elliott Wave analysis. Since then, it has shown significant sideways price action, and while USDSGD has been resting, it now provides another opportunity to buy the pair.

The below 30-minute USDSGD chart shows an updated Elliott Wave impulsive count from December 18. It starts with a sharp rise of over 100 pips to yellow wave iii at 1.2675, which is in line with our previous analysis. Since then, it has been in a prolonged sideways correction, ranging only 37 pips from 1.2646-1.2683.

Guest Commentary: Second-Chance Set-up in USD/SGD

We expect that this price action is part of the yellow wave iv correction, which is an expanded flat. Typically, we’d expect this type of expanded flat to find support between 1.2625 and 1.2645.

Therefore, we’d look to buy USDSGD just above this zone at 1.2650. This presumes a spread of between five and eight pips. We also use this zone to locate the stop just below the bottom of the zone at 1.2620. This is a reasonably tight 30-pip stop.

To make the trade worthwhile from a risk/reward perspective, we’d need to achieve a target of at least 45 pips (reward/risk of 1.5), so a single take-profit position would be 1.2695. This means we are risking $1 to make $1.50.

Based on the price levels achieved by the previous three yellow waves, a target of 1.27 is feasible. In our previous article, based on a higher degree, we discussed take-profit locations of 1.2640 and 1.2690, with likely upside to 1.2725. As a result, a target of 1.2695 is reasonable on this trade and consistent with our previous analysis.

Given the tight stop, there is one crucial aspect of trade management to discuss. If price is close to entry, but key US or Singaporean news is due, remove the orders for at least 30 minutes until price action returns to normal. If a news item has forced price below the 1.2620 stop level, abandon this trade idea altogether.

Revised Short Set-up for USD/JPY

Trade: Buy USDSGD at 1.2650, or between 1.2630 and 1.2650
Stop Loss: Place stop at 1.2620, below yellow wave iv
Take Profit: A single take-profit position can be placed at 1.2695
Trade Management: Remove orders if price is near entry and key US or Singaporean news is about to be released

By Todd Gordon, founder, TradingAnalysis.com

Receive three free months of premium trade signals and analysis by visiting TradingAnalysis.com.

Disclaimer: Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors.

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