Analys från DailyFX
DAX Short-term Trading Outlook
What’s inside:
- DAX short-term trend is lower
- Hourly chart in focus
- Support and resistance levels outlined
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On Tuesday, we discussed the DAX from a broader perspective, taking the view that the decline off the January highs is corrective within a longer-term uptrend. Today, we will get a bit more granular and look at the short-term time-frame.
The hourly chart remains clearly stuck within the confines of a downtrend since the 1/26 high, marked by a series of lower highs and lower lows. This morning the market attempted to push through the trend-line off the late-Jan high and above resistance from 2/7 back to 2/2, but was rejected in trying to do so.
This is where things get a bit tricky for the short-term trader. While the trend at this time is still favorable for shorts, support exists right around 10480. Not far below we have the 10400/425 area to look for signs of support as well.
While the path of least resistance is lower in the near-term, traders operating from the short-side will want to pay close attention to how the market responds to support levels for signs that the recent slide is coming to an end. Yesterday, for example, in the afternoon the DAX was headed south when it tried to dip below 10480 but quickly found buyers into the close; buyers have stepped in twice in two days at this level. Any approach made on that level will be watched with interest. Shorts will want to perhaps tighten up stops, or stand aside if flat upon approach. Those looking to play for a bounce or scoop for a bigger picture trade may want to use that level as the line-in-the-sand for entries from the long-side.
A break below 10480 will find the DAX with a little room to run to the downside, but not much as 10425/400 arrives. This will be another important reaction zone to be treated similarly to 10480.
For now, the trend off the Jan 26 highs is lower, and from a short-term trading perspective we will run with that as the path of least resistance as long as a higher from 2/7 doesn’t develop or an aggressive bounce doesn’t develop off of one of the key support levels discussed.
DAX: Hourly
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—Written by Paul Robinson, Market Analyst
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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.
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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
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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