Analys från DailyFX
Dollar Selloff Continues Before Pivotal Fed Policy Announcement
Talking Points
- US Dollar Issues Lowest Close in 3 Months Before FOMC Outcome
- SP 500 Continues to March Higher, Testing the Index’s Record High
- Gold Prices Drop to Seven-Week Low Beneath the $1300/oz Figure
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US DOLLAR TECHNICAL ANALYSIS – Prices broke support at 10620, the 76.4% Fibonacci expansion, exposing a rising trend line set from early April (now at 10574). This barrier is reinforced by the 100% level at 10561. A further push below the latter barrier targets a falling channel bottom at 10528. Near-term resistance is in the 10646-57 area, marked by the August 16 low and the 61.8% expansion.
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 took out resistance at 1701.80, the 50% Fibonacci expansion, exposing the August swing high at 1709.60. A push above this barrier targets the 61.8% Fib at 1719.60. The 1701.80 level has been recast as near-term support, with a reversal beneath that eyeing the 38.2% Fib at 1684.10.
Daily Chart – Created Using FXCM Marketscope 2.0
GOLD TECHNICAL ANALYSIS – Prices broke below support at 1316.01, the 38.2%Fibonacci expansion, exposing the 50% level at 1279.68. The 1316.01 mark has been recast as near-term resistance, with a reversal back above that eyeing the 1347.52-60.96 region marked by a horizontal pivot as well as the 23.6% expansion.
Daily Chart – Created Using FXCM Marketscope 2.0
CRUDE OIL TECHNICAL ANALYSIS– Prices declined as expected after putting in a bearish Dark Cloud Cover candlestick pattern. A break of support at 105.93, the 23.6% Fibonacci retracement, has exposed the bottom of a rising channel set from early July (now at 104.38). A further push beneath that targets a rising trend line established from mid-April, now at 103.01. The 105.93 level has been recast as near-term resistance, with a turn back above that aiming for the channel top at 110.76.
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.
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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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