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Dollar Takes Aim at Monthly High, SPX 500 Reversal Risk Remains

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Talking Points:

  • US Dollar Moves to Challenge November Swing Top
  • SP 500 Sets New High But Reversal Risk Remains
  • Gold Vulnerable to Deeper Losses, Oil May Recover

Can’t access to the Dow Jones FXCM US Dollar Index? Try the USD basket on Mirror Trader. **

US DOLLAR TECHNICAL ANALYSIS – Prices rebounded from resistance-turned-support at the top of a falling channel set from July (now in the 10493-521 area) as expected. Near-term resistance is in the 10641-53 region, marked by the November 12 high and the 23.6% Fibonacci expansion. A push above that targets the 38.2% level at 10839.

Forex_Dollar_Takes_Aim_at_Monthly_High_SPX_500_Reversal_Risk_Remains_body_Picture_5.png, Dollar Takes Aim at Monthly High, SPX 500 Reversal Risk Remains

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 are testing resistance at 1808.20, the 150% Fibonacci expansion, with a break upward targeting the 161.8% level at 1820.80. Negative RSI divergence continues to warn of ebbing upward momentum, hinting a reversal may be around the corner. Near-term support is at 1795.50, the 138.2% Fib. A reversal back beneath that aims for the 123.6% expansion at 1779.80.

Forex_Dollar_Takes_Aim_at_Monthly_High_SPX_500_Reversal_Risk_Remains_body_Picture_6.png, Dollar Takes Aim at Monthly High, SPX 500 Reversal Risk Remains

Daily Chart – Created Using FXCM Marketscope 2.0

GOLD TECHNICAL ANALYSIS Prices recoiled from resistance at a falling trend line set from late October. A break below support at 1249.18, the 61.8% Fibonacci expansion, has exposed the 76.4% level at 1222.60. A reversal back above 1249.18 aims for the trend line (now at 1265.38), followed by the 50% Fib at 1270.67.

Forex_Dollar_Takes_Aim_at_Monthly_High_SPX_500_Reversal_Risk_Remains_body_Picture_7.png, Dollar Takes Aim at Monthly High, SPX 500 Reversal Risk Remains

Daily Chart – Created Using FXCM Marketscope 2.0

CRUDE OIL TECHNICAL ANALYSIS Prices continue to consolidate above the November 14 low 92.49, with positive RSI divergence hinting a bounce may be ahead. Initial resistance is at 95.37, marked by the 14.6% Fibonacci expansion and reinforced by the top of a falling channel set from late August. A break above that initially exposes the 23.6% level at 97.14. Alternatively, a move below 92.49 targets the channel bottom at 89.68.

Forex_Dollar_Takes_Aim_at_Monthly_High_SPX_500_Reversal_Risk_Remains_body_Picture_8.png, Dollar Takes Aim at Monthly High, SPX 500 Reversal Risk Remains

Daily Chart – Created Using FXCM Marketscope 2.0

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

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Contact and follow Ilya on Twitter: @IlyaSpivak

Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

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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

EURUSD Weekly Technical Analysis: New Month, More Weakness

—Written by Paul Robinson, Market Analyst

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You can follow Paul on Twitter at@PaulRobinonFX.

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Analys från DailyFX

Euro Bias Mixed Heading into October, Q4’17

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Euro Bias Mixed Heading into October, Q4'17

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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British Pound Reversal Potential Persists Heading into New Quarter

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British Pound Reversal Potential Persists Heading into New Quarter

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

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