Analys från DailyFX
ASX 200 Technical Analysis: January Peak Back in View
Talking Points:
- The ASX 200 loitered worryingly under January 9’s 19-month peak for nearly three weeks
- Now the bulls have girded themselves for another crack at it, and they are getting close
- What will happen if they get there will be key
For a while there Australia’s ASX 200 equity benchmark looked like an index in need of new direction.
Sure, it joined in the New Year optimists’ equity rally with a will. The ASX enjoyed a buying boost which took it up to 19-month highs on January 9. But that was more than 20 trading days ago. The index hasn’t slipped very far since, but it hadn’t shown much appetite to revisit those highs either.
Things changed five days back. Since then, Wall Street’s record-breaking vigor has helped the ASX chalk up five straight days of gains. That’s a line of green we haven’t seen for the Aussie index since its climb to that January peak of 5829.7.
Will it have the stomach to assault that peak again?
Well, it’s looking more and more like it. The bulls dealt with near-term technical resistance at 5739.80 on Monday. As long as the index can stay above there, then 5759.00 and 5796.60 will be the next hurdles to overcome. That second level would take it above January 9’s closing level, but still leave the index shy of the 5829.1 high traded on that day.
Can it get there? Well, this is likely to be a case of “one resistance at a time,” but the moving averages look supportive. At present 200-day moving average is some way below the 100-day (see chart below). These signals are not infallible, but a higher shorter term average is usually a bullish indicator.
Getting back to the peak: ASX 200
Chart Compiled Using TradingView
Technically speaking, a return to January 9’s peak probably looks more likely than not. However, what the ASX does if and when it gets there will be fascinating. A meaningful push higher will probably embolden the bulls, but another failure at that top will only see it become a more formidable barrier.
OK, so it’s your favorite currency, but is it anyone else’s? Check out the DailyFX sentiment page to find out.
— Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
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.
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
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
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