Analys från DailyFX

EUR/JPY Technical Analysis: Support at Old Resistance Ahead of ECB

Published

9 år ago

7 september, 2016

DailyFX

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Talking Points:

EUR/JPY Technical Strategy: Range discussed in last article saw top-side break, now Support showing at Old Resistance.
EUR/JPY could see an increase in volatility around tomorrow’s European Central Bank announcement.
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In our last article, we looked at the relatively consistent range that had built-in throughout the month of August in EUR/JPY. And while this range was fairly well-constructed and remained within pre-defined support and resistance levels, the prospect of playing a range in either the Euro or the Yen may have caught quite a few traders by surprise, especially given the potential for macro drivers behind each represented currency.

We began to see this price-in as markets ushered towards a September that would bring ‘big’ Central Bank meetings from both the U.S. and Japan; and EUR/JPY staged a top-side breakout as Yen-weakness began to show. This theme of Yen weakness wasn’t relegated to just the Euro, as it appeared as though anticipation of another move from the BoJ at their next meeting was eliciting pre-emptive Yen-selling.

The start of this week saw the brakes get tapped on that theme as the Yen has reversed a portion of those losses; and this has helped to bring EUR/JPY back down to support around 114.08, which is the 38.2% Fibonacci retracement of the ‘Brexit move’ in the pair, taking the high and low from June 24th’s price action. Traders looking to get long in the pair can use this as a basis for top-side entry, with potential support showing up around old, prior range resistance.

Created with Marketscope/Trading Station II; prepared by James Stanley

With the European Central Bank on the docket for less than 24-hours from now, traders would likely want to incorporate a potential for an increase in volatility. As in, be careful of tight stops as whipsaw around the announcement could trigger the trader out of a position before the setup ever has a chance to ‘work.’ We discussed what this ECB meeting might bring in this week’s forecast on the Euro; and likely we’re looking at either an extension of QE beyond its current March 2017 end-date, or nothing at all. And as we said in the forecast, it may make more sense for the ECB to keep some ‘powder dry’ with the aim of making that extension announcement in December.

If the ECB does not extend QE at tomorrow’s meeting, we could see the bullish run in EUR/JPY continue as we approach the widely-awaited September Bank of Japan meeting.

— 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

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