Analys från DailyFX
DAX Ready for New Record High Following First Round of French Elections
What’s inside:
- DAX rips on outcome of the first round of the French presidential elections
- Another higher low carved on the daily, higher high/new record levels very near
- Levels and considerations outlined
See the Q2 forecast for a longer-term view of where global equity markets look to be heading.
This morning, the DAX is trading higher by 2.6% following the outcome of the first round of the French presidential election. The two winners from yesterday’s election, Macron and Le Pen, are headed for a May 7 run-off election, with market optimism buoyed on the former winning. The French CAC 40 index is flying, up over 4% at the time of this writing. The Nikkei gained 1.37% in Asia, the FTSE is up 1.6% in London, while the SP 500 futures are currently up 1% hours ahead of the open in New York.
The DAX wasn’t in the best health, technically speaking, heading into the weekend, but that wasn’t to matter with the French election on everyone’s minds. The German index is now only a stone’s throw away from the record high of 12391 set in 2015. Back on April 3 the DAX traded up to very near the old high before quickly reversing from 12375 and not bottoming until Thursday at 11941, so sellers are in the vicinity of record highs.
While recently the DAX broke the December trend-line and lower parallel extending higher from the February low, Thursday’s low came as yet another higher low in the broader trend higher. Barring a sharp reversal of today’s gap, it looks likely the DAX will soon notch out a new higher high on a breakout to new record levels. A move above 12391 opens the door up for further gains, but there is resistance even at new heights by way of the top-side trend-line extending higher from the August 2016 peak and upper parallel running over peaks in Feb, Mar, and this month’s high. These lines come in between approximately 12475 and 12555. In the short-term a pullback may be supported by the recaptured December trend-line close to 12275.
DAX: Daily
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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.
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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