Analys från DailyFX

EUR/JPY Technical Analysis: BOJ Breakdown

Published

9 år ago

3 augusti, 2016

DailyFX

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Talking Points:

EUR/JPY Technical Strategy: Prior near-term up-trend in question after last week’s BoJ announcement did not deliver the monetary ‘bazooka’ that many were hoping for.
EUR/JPY is continuing to trade lower as stimulus bets price-out of the market, but how price action responds while near support will be telling for near-term directional biases.
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In our last article, we looked at the prospect of a fresh trend forming in EUR/JPY. As we had written, given that price action had throttled-higher with such aggression, traders would likely want to wait for a cleaner setup before looking to chase the young trend while so near highs. But it was the reasons for that aggressive top-side price action that would likely drive traders to looking for weak-Yen setups. The prospect of enhanced stimulus coming out of the Japanese economy could potentially roil the Yen for months, similar to what markets had in 2012-2013 as ‘Abenomics’ first took the world by storm.

But those efforts, at least at this early stage, have largely fallen flat. The Bank of Japan underwhelmed markets by not triggering the monetary ‘bazooka’ that many were looking for at their July meeting, and then the Japanese budget unveiled earlier this week indicated less fiscal stimulus than what was being expected. This has driven stimulus bets out of Japanese markets, in both the Nikkei and the Yen, as hopes are diminishing for the delivery of that ‘bazooka’ of stimulus, and this is driving price action towards longer-term support levels that could make short-side continuation an unattractive prospect, outside of any bigger-picture major macro sell-offs.

Underneath current price action are three longer-term support levels of interest, with 112.00 being the 76.4% Fibonacci retracement of the 2008 high to the 2012 low; 110.81 functioning as the July ‘swing-low’ in the pair, and 109.19 being the ‘Brexit low’ in EUR/JPY. These levels can be utilitarian, as traders can use these as short-term profit targets for faster strategies looking to take advantage of near-term bearish momentum. But for traders with longer-term outlooks or approaches, more interesting and more attractive from a risk-reward standpoint could be support coming-in around either 112.00 or 110.81. This could open the door to top-side strategies in anticipation of the September BoJ meeting. Outside of any major macro-economic ‘risk off’ events, we’ll likely see markets attempting to anticipate another increase in stimulus out of Japan ahead of that rate decision.

Created with Marketscope/Trading Station II; 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

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

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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

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

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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

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