Analys från DailyFX
DAX Technical Outlook: Bullishly Quiet
What’s inside:
- DAX quiet after Monday’s French election-induced explosion
- Support not far below in the form of prior highs, trend-line
- Resistance in form of top-side t-lines to watch on next push higher
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Since the big gap-and-rip on Monday, European markets have been calm, with the DAX carving out ‘holiday-trading-like’ ranges the past couple of trading sessions. So far, the fact it has held onto those gains and gone into a quiet phase suggests sellers aren’t too eager at this juncture. A gradual pullback towards the 12375/12391 will be the first test of old highs and a logical spot to look for the market to hold.
There is the December trend-line to keep an eye on should we see a dip below the beforementioned levels. It arrives at this time at around 12330. The line was breached not long before the pop this week, but could be an angle the market is still working off of; we’ll know if it is in event of a dip down to it and buyers show up (that’s how we validate any level of support/resistance we identify – does the market respond or not?)
Looking higher: In Monday’s piece, we said while the DAX was headed for new record highs there still lies resistance not too far ahead. A pair of top-side trend-lines sit in the way; the nearest line, which was very nearly tagged on Tuesday, extends across peaks starting back in August 2016, and the second line crosses over highs created since the latter part of February. These lines aren’t viewed as significant resistance, but nevertheless could act as speed bumps.
All-in-all, the DAX looks solid up here. A little time and some slightly downward probing of support levels should do the market good before rising to new heights.
Heads up: ECB rate decision in just a few hours from the time of this writing. Little expectations for any fireworks from the meeting, but as per usual wrangle risk in anticipation of the unexpected. Economic calendar.
DAX: Daily
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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
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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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