Analys från DailyFX

A "Steamroller" AUD/CAD Trend That May Soon Reverse

Published

11 år ago

24 april, 2014

DailyFX

Talking Points:

”Steamroller” Momentum in AUD/CAD
Textbook Pullback to Daily Support
The Key Support Zone for Buying AUD/CAD

Few traders would be willing to stand in front of a trend that has exhibited a lot of momentum, and that’s precisely what can be seen on the below hourly chart of AUDCAD.

The last couple days have been extremely volatile for the Australian dollar (AUD) against all currency counterparts, and as such, many AUD charts look like the one below. As a result, most short-term traders will likely already be short or looking for an AUD short right now. However, for traders who wish to enter on the hourly time frame, it is worth considering how much room is actually left for this downward move to run.

Guest Commentary: News-Inspired Momentum Move in AUD/CAD

As shown, there have already been two clear legs to the down side in AUDCAD, and in spite of the steamroller-type momentum, there are bigger-picture factors that suggest that there may be at least a pause or bullish reaction in the near future.

The daily chart below shows this proposition very clearly, with prices pulling back to an extremely obvious rising support line. Given that this upward move has been in progress since January 2014, it seems reasonable to assume that residual bulls watching this time frame will give the upside one more try. As there are more than 130 pips of potential upward movement from the nearby trend line, and because this is such a textbook pattern, it seems worthy of a trade or two on the lower time frames.

Guest Commentary: Textbook AUD/CAD Pullback to Support

The four-hour chart below tells the story even more definitively, showing an obvious zone of confluence support. From this four-hour perspective, the most telling feature about this pullback is the lengthening candle wicks as price approaches the support zone. Nonetheless, in order to respect the extreme bearish momentum seen recently, the zone selected is 1.0165-1.0197, which is a little further away than it might otherwise be.

Guest Commentary: Key Support Zone for Buying AUD/CAD

In spite of everything, this support zone is only a mere 32 pips deep, which satisfies even more stringent risk considerations. Nonetheless, an entry on the hourly time frame would be preferable for this trade, using pin bars, bullish engulfing patterns, and/or bullish reversal divergence as viable entry signals. All that remains at this point would be to wait for price to touch the highlighted support zone.

Of course, two or three attempts may be required in order to effectively enter and stay in this trade. By selecting a support zone that is slightly further away from the current price, the hope is that any last-minute choppiness will be accounted for. However, a notable disadvantage is that if price suddenly turns around before touching the blue box, traders could potentially miss out on this move.

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

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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