Analys från DailyFX

An AUD/CHF Set-up That Most Traders Dream About

Published

11 år ago

5 november, 2013

DailyFX

Talking Points:

The Biggest Attraction About AUD/CHF
Where the Best Entry Point Will Be
A Signal to Help Validate the Entry

In spite of the heightened uncertainty, the market has been generous so far. A recent NZDJPY trade delivered immediately, and even our GBPNZD set-up eventually obliged after a reduced loss on the first attempt. Nonetheless, the large momentum moves from last week continue to cloud the outlook for both bulls and bears alike.

Today, the main pairs of interest include the Swiss franc (CHF), with which we will pair the Australian dollar (AUD) because it allows for a more conservative and potentially safer entry. The trade-offs for that additional safety come in two forms, however: 1) The set-up may not materialize; and 2) Even if it does, it may take a while to work.

Nonetheless, preserving capital sits atop the agenda in adverse market conditions, and as a result, it pays to be picky when selecting trades. The biggest attraction about AUDCHF is the clear downtrend that has formed on the weekly chart below.

Guest Commentary: The “Classic” AUD/CHF Bear Flag

Chart pattern enthusiasts will recognize the current formation as a classic bear flag with a very long flag pole. Thus, should we be able to catch the end of the flag just before it breaks, it could potentially develop into a wild ride down, which would be a dream scenario for most every trader. That potential alone is reason enough to favor AUDCHF over the others.

The pattern that we hope will develop is shown on the daily chart below. Price has risen for five candles now, although admittedly, one of those is a Sunday candle. Regardless, it seems reasonable to locate an entry level at the end of this upward movement.

Guest Commentary: Rising Wedge on AUD/CHF Daily Chart

Fighting momentum like this head on is never a good idea, so resistance is borrowed from the top of the wedge. Due to the heavy momentum, a somewhat larger estimate of resistance is called for. In this case, the resistance zone is 0.8715-0.8782, which is the approximate size of the daily average true range (ATR), or 67 pips.

In practice, some slowing of momentum on the four-hour chart prior to hitting the resistance zone would be ideal. However, the trade would be valid regardless of whether or not price got there.

Guest Commentary: An Ideal Momentum Signal to Watch for

An_AUDCHF_Set-up_That_Most_Traders_Dream_About_body_GuestCommentary_KayeLee_November5A_3.png, An AUD/CHF Set-up That Most Traders Dream About

The trigger for this trade would be derived from some kind of reversal pattern on the hourly chart, which usually (but not always) would be a reversal divergence. If the slowing of momentum indicated in the above scenario develops, then the trade can be taken with greater confidence.

In any case, it is still best to divide the trade into longer- and shorter-term components so as to make defensive trading possible. The short-term trade can be removed at the first sign of trouble in order to reduce risk on the trade, leaving the longer-term position in place to catch a large move, should one develop.

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

Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

Published

8 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

8 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

8 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