Analys från DailyFX
Dollar Up, Oil and Yen Down as Iranian Deal Reverberates through Markets
Talking Points:
– Crude Oil slides nearly -1.5% after Iranian nuclear deal reached.
– “War premium” being priced out of commodities markets – precious metals lower, too.
– Dollar firms, Yen weakens as equity markets jump across globe.
To receive this report in your inbox every morning, sign up for Christopher’s distribution list.
INTRADAY PERFORMANCE UPDATE: 10:50 GMT
Dow Jones FXCM Dollar Index (Ticker: USDOLLAR): +0.22% (+0.73% prior 5-days)
ASIA/EUROPE FOREX NEWS WRAP
Risk markets across the globe were provided some new stimulus to start the week as oil prices plummeted after an Iranian nuclear accord was reached among the P5+1 powers (China, France, Germany, Russian, the United Kingdom, the United States, and Iran) in Geneva, Switzerland. Notably, Crude Oil has dropped by -1.42% on the day to $93.49/brl.
The reduction in “war premium” – presumably that the chance of conflict in the Middle East has been diminished based on this deal – extends beyond oil. Gold has dropped by another -0.95% to $1232.03/oz, while Silver is down -0.51% to $19.77/oz. In spot FX, the Yen is the worst performer overall, and the USDJPY has rallied by +0.42% to ¥102.70. Bond markets are confirming the reduction in demand for safety, with the 10-year US Treasury note yield rising by +0.7-bps to 2.750%.
While the impact outside of energy markets might be slower moving or less sensitive to the Iranian accord, two questions are necessary going forward: will the fundamentals allow the breakdown in oil to continue? (a major positive for the global economy); and what are the technical levels to look for in a trade?
Crude Oil Daily Chart: April 10, 2013 to Present
Want to automate your trading or trade baskets of currencies? Try Mirror Trader.
First, the major fundamental event that led to the deal: Iranian President Hassan Rouhani assuming power on August 3, 2013. Since then, oil has fallen by -12.50% (at the time of writing today), and US gasoline prices are down by -3.78% over the same time (which boosts US consumers’ spending power). With about $7B in economic sanctions relief coming to Iran, we suspect that there is good reason to believe that further tension in the near-term is a distant possibility.
If the “war premium” continues to be reduced and the fundamental shift since early-August remains on course, Crude Oil is nearing a potentially major inflection point as seen in the chart above:
– Crude Oil is sliding back towards late-October lows at 92.49/51, coinciding with the uptrend off of the 2008 and 2013 lows (lower black dotted line).
– A weekly close below 92.49/51 could signal the beginnings of a longer-term downtrend.
– First support comes in at 90.00, psychologically and technically from ascending TL support off of the 2009, 2011, 2012, and 2013 lows.
– Below 90.00, 87.14, 84.20, and 77.50/75 are the next swing lows seen from 2012 to present.
– A rebound above the November high (95.59/64) would invalidate the burgeoning bearish bias.
ECONOMIC CALENDAR – UPCOMING NORTH AMERICAN SESSION
See the DailyFX Economic Calendar for a full list, timetable, and consensus forecasts for upcoming economic indicators. Want the forecasts to appear right on your charts? Download the DailyFX News App.
— Written by Christopher Vecchio, Currency Analyst
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
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
-
Analys från DailyFX8 år ago
EUR/USD Flirts with Monthly Close Under 30 Year Trendline
-
Marknadsnyheter1 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
-
Analys från DailyFX7 år ago
Gold Prices Falter at Resistance: Is the Bullish Run Finished?
-
Nyheter5 år agoTeknisk analys med Martin Hallström och Nils Brobacke
-
Marknadsnyheter6 år ago
Tudorza reduces exacerbations and demonstrates cardiovascular safety in COPD patients