Analys från DailyFX
CAC 40 Breaks Lower to Open Weekly Trading
Talking Points:
- CAC 40 Breaks Lower to Start Trading
- Bearish Daily Breakouts Begin Below 4,874.40
- Looking for additional trade ideas for equities markets? Read our 2017 Market Forecast
CAC 40 has started Monday’s trading lower, now down -0.75% for today’s session. European markets as a whole are mixed, with little data on the horizon for this week’s trading. Top winners for the CAC 40 include Kerring (+1.15%) and Sanofi (+0.86%). Losers for the session include Nokia (-2.74%) and Air Liquide (-2.50%).
Technically, the CAC 40 can be seen turning lower in the daily graph below. Previously, the Index had been trading in a 4 day range, to conclude last week’s trading. Friday’s low represented support for this range at 4874.40, and a breakout below this value has opened the CAC 40 up to future bearish possibilities. At present the Index remains supported above the 10 period EMA (Exponential Moving Average) at 4874.34. In the event that prices rebound near present levels, it may suggest a reversal back towards the previous point of daily resistance.
CAC 40, Daily Chart with Range
(Created Using TradingView Charts)
Intraday the CAC 40 is turning lower, and has already traded through the first point of support found at 4,885.5. At present the Index remains above the 30 minute 200 period SMA (simple moving average). A move through this point would add to the bearish case, with the next value of support being found at the S2 Classic pivot at 4,867.10. In the event that prices break through this point, the CAC 40 may attempt to trade to new 2017 lows under today’s S3 pivot at 4,823.60
If prices rebound off of the current daily low of 4,867.80 it may suggest that the Index may then retrace back towards values of resistance. For Monday’s session, this includes the R1 classic pivot at 4,922.9 and the R2 pivot at 4,935.80. A move above this point should be seen as significant as it would place the CAC 40 back above the previously described trading range. In this bullish scenario, the CAC 40 would then be trading back in the direction of its primary daily trend.
CAC 40, 30 Minute Chart with Pivots
(Created Using TradingView Charts
— Written by Walker, Analyst for DailyFX.com
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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
—Written by Paul Robinson, Market Analyst
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You can follow Paul on Twitter at@PaulRobinonFX.
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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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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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