Analys från DailyFX

EURGBP Outlook: Testing Trend-line Resistance Ahead of ECB

Published

8 år ago

9 mars, 2017

DailyFX

What’s inside:

EURGBP currently testing trend-line back to last year
Vulnerable here as ECB meeting approaches in a few hours
Multi time-frame look (short-term pattern may develop)

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EURGBP has been persistently higher over the past couple of weeks, especially after Sterling broke down below the 12400 level versus the US Dollar, a level it held in place since the latter part of January. The past couple of sessions have been a battle up against the trend-line running down off the 10/7 spike high. Yesterday, the cross-rate put in a small reversal bar after attempting to clear above; we’ll see from here how it wants to respond. It’s currently treading slightly higher ahead of today’s ECB meeting.

EURGBP: Daily

Created with TradingView

On the 4-hr, the trend has been very clean, and with yesterday’s small reversal and the trend-line rising up from the 2/23 low breaking, weakness could be in store soon. If we get even more granular, a small head-and-shoulders is possibly developing on the hourly time-frame. A drop below the neckline will be needed for the pattern to be validated; the outcome of the ECB may not allow for a smooth trade here.

EURGBP: 4-hr/1-hr

Created with TradingView

Getting back to the daily, if EURGBP breaks materially lower, the price sequence will bring further into focus what is becoming a complex head-and-shoulders pattern now turning into a massive wedge extending back to July. From a macro standpoint, a little more time coiling is the preferred path on this end; it could result in an explosive move one way or another depending on the direction of the break.

On a break above the trend-line, and if immediately (i.e. ECB-induced), the short-term HS pattern won’t trigger. Additionally, the break won’t come at a point where a wedge has developed enough to call it a sound pattern break, at least not on this end. But nevertheless, a break above the trend-line will be considered a bullish event, with the still possible left shoulder level of 8724 as potential resistance and then 8852 following.

In a few hours from now, Draghi and Co. will be announcing the ECB’s latest decision on monetary policy, and with no changes expected all eyes/ears will be on Mario Draghi in the press conference. (See the economic calendar for details.) If volatility is to stem from this meeting, it will come on the heels of any unexpectedly dovish/hawkish language outside of market expectations, which at this time are rather muted. But with that said, as always, vigilance is wise when faced with headline risk.

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—Written by Paul Robinson, Market Analyst

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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

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