Analys från DailyFX

EUR/JPY Technical Analysis: A Crucial Zone of Support Lurks Below

Published

9 år ago

25 januari, 2017

DailyFX

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Talking Points:

EUR/JPY Technical Strategy: Longer-term bullishness intact, near-term range-bound.
After setting a new high shortly after last month’s rate hike from FOMC, EUR/JPY has been unable to break-above resistance while support has remained respected, leading to range-bound price action over the past ~month.
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In our last article, we looked at the ‘bullish range’ that had developed in EUR/JPY. We assigned a bias to the range given the veracity of the prior-move that had catapulted EUR/JPY higher by more than 13.6% from the lows in June and 9.1% from the lows of election night: The fact that higher-low support remained so well-respected was deductively bullish to the longer term price action in the pair.

Also relevant to bulls is the fact that another throw of QE from the European Central Bank in December merely elicited a ‘higher-low’ in EUR/JPY without as much as a prior support test. This is another deductively bullish indication that can increase the interest for longer-term bullish approaches. There is but one issue with that approach at the moment, and that’s the fact that resistance in the zone from 123.09-124.09 has proved extremely rigid and difficult to break.

After short-term support had yielded to selling pressure last week, buyers returned to drive prices higher but were unable to even reach that prior zone of resistance at 123.09, leading to a short-term ‘lower-high’ in the pair. So, what we have now is a shorter-term range that’s a bit messier and more difficult to work with; while the longer-term bullish posture remains intact.

For those that do want to trade the bearish side of EUR/JPY, they’d likely want to wait for a break of the confluent zone of support around the 120.00-figure. This zone has the 61.8% Fibonacci retracement of the ‘big picture’ move in EUR/JPY (the low in the year 2000 up to the 2008 high), the 38.2% retracement of the ‘post-Election move is at 120.15 and, of course, 120 itself is a major psychological level in the pair. Should price action break-down to this zone, this could open the door for bullish positions. But if we do get a concerted break of this area, with buyers unable to quell selling pressure – this can open the door to bearish continuation.

On the bullish side, traders can watch that same zone in the effort of getting long after some stops that are almost assuredly sitting below this recent range get cleared-out. But if we don’t get that support test in the zone around 120.00, traders can look to that same 123.09-124.09 area of resistance to signal bullish continuation prospects. A higher-high can denote bullish continuation, at which point the trader can look to buy a ‘higher-low’ in the pair.

Chart prepared by James Stanley

— Written by James Stanley, Analyst for DailyFX.com

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Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

Published

9 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

9 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

9 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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