Analys från DailyFX
DAX: Upon a Busy Intersection, How it Reacts Could Be Important Long-term
What’s inside:
- DAX continues to trade higher through and into more resistance
- Big picture potential outlined
- A pullback looks reasonable off intersection of resistance, but how it responds after is very important longer-term
Yesterday, we noted momentum in the DAX as weakening into a zone of resistance, but thus far despite the rally not holding a great deal of power the index continues to head for higher ground. The zone we had penciled in lies in the 10250/350 vicinity. This area consists of a trend-line off the April highs (currently trading above), peaks from May and June, as well as the back-side retest of the 2011 trend-line. Now that the DAX is threatening to move to the upper-bounds of the noted zone, another point of trend resistance needs to be addressed – the trend-line off the 2015 highs. The intersection is getting pretty busy…
DAX (Ger30) Daily: Dec ’15 to Present
With the current advance moving towards the 2015 trend-line, a longer-term pattern could be triggering – an inverse head-and-shoulders pattern with a bull-flag on the verge of breaking out (depends on how you view it).
The top-side trend-line off the 2015 record highs and the 2011 trend-line which the DAX has traded beneath for most of 2016 are currently at the forefront of our minds. The two are interesting which makes for a very pivotal point.
If the DAX can’t clear above the two of them and turns back lower, then the downtrend off the 2015 highs remains in place for now and the inverse HS/bull-flag scenarios are on hold at best, off the table at worst. However, if the DAX in the coming weeks can move through the intersection unscathed, then the prospects of seeing a continued advance in line with the previously mentioned inverse HS formation/bull-flag becomes greatly enhanced.
Weekly: 2008 to Present
Getting back to the daily chart, the confluence of resistance suggests a decline off these levels in the short-run is a probable scenario. However, if the DAX can clear above and take out the April high at 10486 at some point, then a much more significant move to the upside could be underway.
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—Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX.
You can email Paul at probinson@fxcm.com with any questions or comments.
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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