Analys från DailyFX
DAX 30 Bounces As Bargain Hunters Step In
Talking Points
- DAX 30 trades higher as bargain hunters appear to have stepped in.
- The short-term trend is bearish below the April 3 afternoon intraday high of 9972.
- Overnight, the Caixin China PMI Services for April declined to 51.8 from 52.2, while this morning, Markit U.K. PMI Services declined to 52.3 from 53.6.
The DAX 30 (CFD: GER30) was up this morning, as it appears that the slide over the last few days has attracted bargain hunters with the DAX 30 trading relativity near to its April monthly low of 9437 (363 points away) and far away from its April high of 10,488 (682 points away).
In the short-term the trend is bearish below the April 3 afternoon intraday high of 9972, a level which is also near the opening level yesterday. If this downtrend continues to dominate, the long-term trend, which has been bullish since February, could come under pressure. The most recent swing low of the bullish trend since February is the April 7 low of 9437 and the next major support level below this level is the February 24 low of 9123.
In the short-term, this morning’s low of 9802 is a support level, followed by the April 4 high of 9750 and the April 12 low of 9615.
The next resistance level beyond the intraday high of 9972 is the April 29 low of 10,025 and followed by the May 2 high of 10,156.
Overnight, the Caixin China PMI Services for April declined to 51.8 from 52.2, which suggests that the Chinese service sector is growing at a slower pace than March, whilst this morning, Markit U.K. Services PMI declined to 52.3 from 53.6. All of the U.K. PMI’s have moved lower in April and suggest weak economic growth in the U.K. The softer conditions are blamed on the pending Brexit Referendum.
Our forecasts for Q2 2016 are now live on the site. Download them for free.
DAX 30 | CFD: GER30
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
— Written by Alejandro Zambrano, Market Analyst for DailyFX.com
Contact and follow Alejandro on Twitter: @AlexFX00
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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