Analys från DailyFX
Dollar Bulls See Pressure From All Sides As Confidence Erodes
What Happened To King Dollar? Get A Free DFX Q2 Market Forecast HERE
Talking Points:
- DXY Technical Strategy: Bias Lower Below 101, Break of May Trendline In Focus
- US Dollar May Recover on Firmer Risk Appetite, Fed Beige Book
- Is the Dollar Drop Done? A Tops-Down Look at USD/DXY
Another year, another disappointing start to the DXY. Much like in January 2016 after the Federal Reserve raised the reference rate the month prior for the first time since 2006, the USD is not providing the follow through that many had hoped would come through. Now, looking at the options market for sentiment clues and the charts, it’s fair to say the DXY stands on a medium term brink of decisiveness worth watching.
Traders hoping for a turn-around in USD are likely better positioned by taking a short-EM view as opposed to DM FX given the recent catalyst and potential catalysts for varying DM currencies like JPY, EUR, GBP. Of course, DXY has a heavy weighting towards DM currencies with the heaviest weighting favoring EUR direction.
On the chart, the key points worth watching on the downside is the YTD low at 98.86, which aligns with the Trendline seen on the chart is below drawn off the May low. Beyond the May Trendline, we could see a move toward the multiple 100% extensions (ABC moves lower) between 97.95/66 that could still indicate a deep pullback in a longer-term uptrend, a view many traders still hold.
If the price breaks the May Trendline as well as the confluence of 100% extension in the upper half of 97, we could begin to see the unraveling of sentiment for longer-term Bulls. In the options market, we continue to see medium term (3-month) outlooks deteriorate. Per Bloomberg, the weighted 3-month 25-delta risk reversal currently shows the smallest premium for calls relative to puts at 60bps since August 2016.
We would likely need to see a close above the confluence of resistance at 101 to expect to see the Bulls rush in. Until then, we’ll follow the yields and look for a move lower in DXY.
Interested In Seeing How retail traders’ Are Exposed In Key Markets? Find out here!
Chart Created by Tyler Yell, CMT
—
Shorter-Term DXY Technical Levels: Wednesday, April 19, 2017
For those interested in shorter-term levels of focus than the ones above, these levels signal important potential pivot levels over the next 48-hours.
Written by Tyler Yell, CMT, Currency Analyst Trading Instructor for DailyFX.com
To receive Tyler’s Closing Bell articles directly via email, please SIGN UP HERE
Contact and discuss markets with Tyler on Twitter: @ForexYell
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
Confidence is essential to successful trading, see this new guide – ’Building Confidence in Trading’.
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
- Crude oil comment: US inventories remain well below averages despite yesterday’s build
- China is turning the corner and oil sentiment will likely turn with it
- Crude oil comment: Europe’s largest oil field halted – driving prices higher
- Crude oil comment: Mixed U.S. data skews bearish – prices respond accordingly
- Crude oil comment: Fundamentals back in focus, with OPEC+ strategy crucial for price direction
-
Analys från DailyFX9 år ago
EUR/USD Flirts with Monthly Close Under 30 Year Trendline
-
Marknadsnyheter2 år agoUpptäck de bästa verktygen för att analysera Bitcoin!
-
Marknadsnyheter4 år ago
BrainCool AB (publ): erhåller bidrag (grant) om 0,9 MSEK från Vinnova för bolagets projekt inom behandling av covid-19 patienter med hög feber
-
Analys från DailyFX11 år ago
Japanese Yen Breakout or Fakeout? ZAR/JPY May Provide the Answer
-
Analys från DailyFX11 år ago
Price & Time: Key Levels to Watch in the Aftermath of NFP
-
Marknadsnyheter1 år agoDärför föredrar svenska spelare att spela via mobiltelefonen
-
Analys från DailyFX7 år ago
Gold Prices Falter at Resistance: Is the Bullish Run Finished?
-
Nyheter6 år agoTeknisk analys med Martin Hallström och Nils Brobacke