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AUDUSD Options Point to Confinement Between Key Price Levels

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What’s inside:

  • AUDUSD one-week projected range (1 STDEV) is 7856-8062
  • Both top and bottom-side projected levels in confluence with price levels
  • One-week implied volatility at 9.3% could be proven correct as aussie digests

Looking for a longer-term view on AUDUSD? Check out our Q3 Forecast.

In the table below you will find implied volatility (IV) for major USD-pairs looking out over a one-day and one-week time-frames. Through the utilization of IV, we’ve calculated the projected range-low high prices from the current spot price within one-standard deviation for specified periods. (Statistically, there is a 68% probability that price will remain within the lower and upper-bounds.)

AUDUSD Options Point to Confinement Between Key Price Levels

AUDUSD options-derived one-week range low high in confluence with important price levels

After ratcheting higher for most of July, AUDUSD cooled its jets and is finding difficulty in breaking above a resistance zone penciled in from around 8060 up to 8160. This zone extends back as far as a key low formed in 2010. The reversal-bar off the bottom of resistance is proving to have been a solid sign of exhaustion so far and could mean even if aussie is to continue trading higher it may take some time before being able to do so. Yesterday we saw another rejection to trade higher following the RBA meeting (the central bank held on rates at 1.5% as expected). The one-week one-standard deviation projected high is at 8062, in almost exact alignment with the exhaustion-day high of 8065. This furthers the notion of seeing price trade below that threshold over the next week.

Looking lower, should we see the recent reversal gain traction lower there lies support around 7874 down to the April 2016 breakout level at 7835. Almost right in the middle of this zone falls the projected one-week low at 7856, and may indicate that support will indeed hold if sellers show up.

Overall, AUDUSD is set up to find difficulty gaing traction in either direction, suggesting one-week implied volatility priced at 9.3% could prove to be just about right.

Fundamental event alert: On Friday, the U.S. jobs report is due out, with expectations for NFP to come in at +180k compared to +222k the month prior. Look for any outsized deviations from expectations to shake up markets. Join us for live coverage of the jobs data as it hits the wires and a roundtable discussion with our analysts. Sign up here.

For other currency volatility-related articles please visit the Binaries page.

AUDUSD: Daily

AUDUSD Options Point to Confinement Between Key Price Levels

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—Written by Paul Robinson, Market Analyst

You can receive Paul’s analysis directly via email by signing up here.

You can follow Paul on Twitter at @PaulRobinonFX.

Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

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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

EURUSD Weekly Technical Analysis: New Month, More Weakness

—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.

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Analys från DailyFX

Euro Bias Mixed Heading into October, Q4’17

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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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British Pound Reversal Potential Persists Heading into New Quarter

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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

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