Analys från DailyFX

EUR/JPY Technical Analysis: Big Level Plays, Now What?

Published

8 år ago

1 mars, 2017

DailyFX

To receive James Stanley’s Analysis directly via email, please sign up here.

Talking Points:

EUR/JPY Technical Strategy: Potential trend-shift, resolving a prior range.
EUR/JPY saw another bounce around the prior swing in the ¥118.50 vicinity, and now prices are back above the ¥120.00 psychological level.
If you’re looking for trading ideas, check out our Trading Guides, they’re free and updated for Q1, 2017. If you’re looking for shorter-term ideas, check out our Speculative Sentiment Index (SSI) indicator.

In our last article, we looked at an interesting reaction in EUR/JPY as a longer-term support swing came into play around ¥118.50. This level had given a fairly aggressive series of bounces in late November/Early December, and a subsequent attempt to take-out this level last week was rebuffed by buyers. But as we warned, the down-side break of the prior range should not be treated lightly; and with such a big level in the mind of market participants at ¥118.50, another visit to this zone seemed highly-probabilistic.

Since then, we’ve seen another test of ¥118.50, with price action even driving a little below to set a new three-month low in the pair at ¥118.19. But buyers showed-up shortly thereafter and have begun to take control of the situation, as prices have now rallied up to resistance, breaking-above a down-ward sloping trend-line.

Chart prepared by James Stanley

Given the prior breach of support combined with the aggressive bullish price action that’s shown-up after-the-fact, and there is a legitimate prospect of top-side continuation plays. The primary issue with timing the long position at the moment is the fact that prices are sitting right on a major psychological level at ¥120.00, and this is coming after a strong break-higher. Bulls may want to wait for one of two things before investigating top-side continuation strategies.

Traders can utilize inside price action to look for top-side trend continuation by looking for a ‘higher-low’ to show-up around a prior level of interest. On the chart below, we look at three potential zones of support for such an approach.

Chart prepared by James Stanley

The down-side on waiting for a higher-low is that it may never show up. If excitement is really building in this theme, buyers may not allow for price action to drip down far enough to test support; so traders can also adopt ‘outside price action’ in the attempt of getting on the long-side of EUR/JPY. For such an approach, traders want to first wait for new highs to further iterate that bulls may be able to take control; and then prior levels of resistance can be watched for ‘higher-low’ support in the effort of trend continuation. On the chart below, we look at three potential levels to utilize for this type of approach.

Chart prepared by James Stanley

— Written by James Stanley, Analyst for DailyFX.com

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Contact and follow James on Twitter: @JStanleyFX

Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

Published

8 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

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.

Analys från DailyFX

Euro Bias Mixed Heading into October, Q4’17

Published

8 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

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

Analys från DailyFX

British Pound Reversal Potential Persists Heading into New Quarter

Published

8 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