Analys från DailyFX
Dollar Rebounds Even as SPX 500 Vaults to New Record High
Talking Points
- US Dollar Launches an Impressive Recovery Before FOMC
- SP 500 Approaching Chart Resistance Level Below 1780.00
- Gold Price Rally Stalls, Crude Oil Recovery Suffers Setback
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US DOLLAR TECHNICAL ANALYSIS – Prices broke back above support-turned-resistance at April’s bottom (10424) and cleared the 23.6% Fibonacci retracement at 10462. Buyers now aim to challenge a formerly broken Wedge formation bottom at 10505, with a further push higher beyond that eyeing the 38.2% Fib at 10529. Alternatively, a move back below 10424 targets the October 23 low at 10354.
Daily Chart – Created Using FXCM Marketscope 2.0
** The Dow Jones FXCM US Dollar Index and the Mirror Trader USD basket are not the same product.
SP 500 TECHNICAL ANALYSIS – Prices recovered as expected after showing a Spinning Top candlestick at support marked by a rising trend line set from late February. A break above resistance at 1754.40, the 100% Fibonacci expansion, has exposed the 123.6% level at 1779.80, with a further push beyond that eyeing the 138.2% Fib at 1795.50. Alternatively, dropping back below 1754.40 sees the first layer of support at 1729.00, the 76.4% expansion.
Daily Chart – Created Using FXCM Marketscope 2.0
GOLD TECHNICAL ANALYSIS – Prices broke higher as expected after putting in a bullish Morning Star candlestick pattern. A pullback from resistance at 1364.06, the 61.8% Fibonacci retracement, sees prices testing the 50% level at 1342.57 as support. A break downward initially targets the 38.2% Fib at 1321.09. Alternatively, a reversal above resistance aims for the 76.4% retracement at 1390.64.
Daily Chart – Created Using FXCM Marketscope 2.0
CRUDE OIL TECHNICAL ANALYSIS– Prices are attempted to edge higher as expected after putting in a bullish Morning Star candlestick pattern at the bottom of a falling channel set from late August. Follow-through has been limited thus far however, with buyers suffering a sizable setback over the past 24 hours. Near-term resistance is at 99.77, the 23.6% Fibonacci retracement, with a break above that targeting the channel top at 101.10. Support is now in the 98.85-93 area, marked by the channel bottom and the October 24 swing low.
Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
Contact and follow Ilya on Twitter: @IlyaSpivak
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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
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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
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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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