Analys från DailyFX

DXY Supported by Favorable Seasonality & 3-yr Trendline

Published

8 år ago

8 maj, 2017

DailyFX

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Talking Points:

DXY Technical Strategy: DXY in favorable technical set-up for bounce
May Forex Seasonality Sees Return of USD Strength versus EUR, GBP, AUD
EUR likely not going to make DXY gains easy to come by

Traders hoping to gain an understanding of the LT direction of the USD would do well to keep an eye on the Trendline connecting higher lows since 2014. Currently, DXY is showing good Trendline support over the longer-term near 98.50. The test of the 3-year Trendline aligns with long-term seasonality studies where DXY has risen in 9 of the past ten years. However, recent momentum in past months have been disappointing DXY bulls, and the EUR is a key reason why DXY fails to gain upside traction.

Much of the EUR downside since 2014, when DXY took off higher on the chart below, has been exasperated by fears of “what’s next?,” for the Euro. However, a look at the options market will show you that over the next two months, the 25-delta risk reversal is trading at its highest levels for the year. In other words, options traders have never worried less about EUR downside relative to the USD this year, which could keep EUR/USD trading higher on average.

Any traders with an upside bias on DXY should continue to watch this Trendline support. Ichimoku currently favors downside momentum continuing and there remains hard resistance at the gap high after the first round of the French Presidential election when EUR/USD gapped over the weekend by its largest margin ever from 1.0750 to ~1.0900.

Despite the Federal Reserve’s forecast to continuing raising the interest rate in the US, with a stable longer-term U.S. rate outlook, and a stabilizing outlook in the Eurozone, we could continue to see upside in EUR/USD and downside in DXY. Such a development would be confirmed with a weekly close below 98.50 (current spot of 3-yr Trendline) on DXY that would likely silence the DXY bears for a while. Only a close above 100.68 on DXY would change the trend outlook.

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DXY Gaps To 2017 Lows After The First Round of the French Election on April 23

Chart Created by Tyler Yell, CMT

Sentiment Highlight: EUR (57.6% of DXY) Sentiment Favoring Further Upside

EURUSD: As of May 8, retail trader data shows 40.5% of traders are net-long with the ratio of traders short to long at 1.47 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.06042; theprice has moved 3.1% higher since then. The percentage of traders net-long is now its highest since Apr 20 when EURUSD traded near 1.07144. The number of traders net-long is 54.5% higher than yesterday and 22.0% higher from last week, while the number of traders net-short is 9.0% higher than yesterday and 11.3% 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.Traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current EURUSD price trend may soon reverse lower despite the fact traders remain net-short. (Emphasis mine)

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Shorter-Term DXY Technical Levels: Monday, May 8, 2017

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.

DXY Supported by Favorable Seasonality amp; 3-yr Trendline

Written by Tyler Yell, CMT, Currency Analyst Trading Instructor for DailyFX.com

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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