Analys från DailyFX

EUR/JPY Technical Analysis: Bullish, but Toppy

Published

8 år ago

10 maj, 2017

DailyFX

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Talking Points:

EUR/JPY Technical Strategy: Intermediate-term: bullish; short-term: mixed.
EUR/JPY set a new 11-month high after this weekend’s French elections, but buyer demand has been unable to sustain the bullish movement.
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In our last article, we looked at the continuation of bullish price action in EUR/JPY after the prior three weeks saw a significant burst-higher. But as we advised, with Non-Farm Payrolls on the docket for later in the week with the second round of French elections due for the following weekend, traders would likely want to wait for a pullback before looking to chase the move-higher.

Since that last article, Emmanuel Macron became the next President of France and, as many had expected, the Euro gapped-higher when markets opened to start this week. But what likely wasn’t expected was the near-immediate selling that ensued in the Euro, as each of those gaps in EUR/JPY and EUR/USD were filled in fairly short order. This bearish short-term price action continued until support showed up just above a prior swing-low at 122.88. At that point, demand was able to hold the lows until a new high printed approximately 24 hours later.

Chart prepared by James Stanley

But what happened after that fresh high is what should get bulls a bit more cautious here, as the Daily chart is looking very toppy with the past three days’ worth of price action unable to extend beyond the prior 11-month high at 124.09.

Chart prepared by James Stanley

So, while most technical methods will denote EUR/JPY’s current bullish nature, the fact that buyers have been unable or unmotivated to extend price action beyond those prior highs should, at the very least, be noteworthy. And while this does not obviate the bullish stance altogether, it does behoove caution against chasing the move while remaining at these elevated levels. RSI divergence is and has been showing on the 4-hour chart since last week.

Chart prepared by James Stanley

Given the strength of the prior move-higher combined with the rationale and the reasons for the move, traders would likely want to avoid entertaining short-side setups until a clearer setup presents itself as a straight fade of a really strong trend can be a daunting way of playing reversals. But on the long side, timing may be an issue as prices remain elevated as this recent bullish run is looking rather long in the tooth.

On the chart below, we’re looking at two support areas to watch in the effort of catching a ‘higher-low’ for trend-continuation strategies in EUR/JPY. Let this short-term top develop to bring prices-lower in order to afford a more-advantageous entry in the direction of the ‘bigger picture’ trend. If support doesn’t show at either of these levels, do not rush the top-side entry.

Chart prepared by James Stanley

— Written by James Stanley, Strategist 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

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