Analys från DailyFX

Dollar Technical Analysis: Recent Hikes Have Led To Peaks in DXY

Published

8 år ago

15 mars, 2017

DailyFX

Talking Points:

-Dollar Technical Strategy: favoring strength, close 102.84 opens up 103.65/82

-Previous Post: Dollar Technical Analysis: DXY Rides Into March On A High Horse

–History of Recent Fed Hikes Have Led To ST Peaks in Yields DXY

-If you’re looking for trading ideas, check out our Trading Guides

The bar for a USD-positive surprise is high, really high. When a rate hike is priced as it is with Wednesday’s FOMC announcement, many traders have turned their focus on whether anticipated rate hikes for the Fed would shift via the median DOT in the DOT plot from three hikes to four hikes this year. Should the Fed fall short, we may see a familiar pattern where a rate hike and less hawkish forecast from the Fed led to a weaker US Dollar in the following months.

Now, the DXY is at an important crossroads from both a technical, sentiment and fundamental point of view. Naturally, traders have been optimistic about US growth due to the consistent surprises in economic data, which also helped reinforce the Fed’s consensus as per recent Fed President Speeches about raising rates multiple times this year.

Looking back over the December 2015 and 2016 rate hike, the hikes marked near tops in the USD. After the 2015 hike in December, the USD traded sideways until finally breaking lower in late-January and trading lower until the following May. Given the Dutch and upcoming French vote in a few months, we could see the EUR take the USD on a wild ride and the G20 meeting this weekend in Germany could also stir up JPY. Currency, trade, and regulations are going to be a focal point of this G20 meeting, which should present some weekend headline risk for major currencies.

Technical View: After the2015 rate hike, the DXY hit a lower high at the 78.6% retracement of the pre-rate hike range of 100.51-97.19. Similarly, the price subsequently failed to hold above the 55-DMA and when broke, began a sharp drop, which aligned with aggressive JPY strength.

Either way, we should be on the watch for how the price reacts to the range between the 61.8-78.6% (102.07/84) retracement zone of the pre-rate hike zone of 2017 of 103.82-99.23. If the price can break above this zone, which would likely align with the hoped-for hawkish lean that the Fed breaks toward the ‘dot’ shift to four hikes, I encourage you to be prepared for further USD strength.

If the price fails to break above the 102.07/84, and subsequently breaks below the 55-DMA, we may be setting up for a drawn-out drop in the USD. It’s difficult to imagine DXY weakness like what was seen in early 2016 that aligned with the Yuan-devaluation panic. However, at the same time, buying USD on a close below a major moving average, currently sitting at 101.42, could set you up for a lot of frustration if other currencies become strong in the wake of USD weakness.

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Chart created by Tyler Yell, CMT

—

Shorter-Term DXY Technical Levels for Wednesday, March 15, 2017

Dollar Technical Analysis: Recent Hikes Have Led To Peaks in DXY

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 of trading.

T.Y.

Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

Published

7 år ago

30 september, 2017

DailyFX

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.

Analys från DailyFX

Euro Bias Mixed Heading into October, Q4’17

Published

7 år ago

29 september, 2017

DailyFX

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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Analys från DailyFX

British Pound Reversal Potential Persists Heading into New Quarter

Published

7 år ago

29 september, 2017

DailyFX

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

To be added to Christopher’s e-mail distribution list, please fill out this form