Analys från DailyFX

EUR/JPY Technical Analysis: V-Shaped Rally into Resistance

Published

8 år ago

20 april, 2017

DailyFX

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Talking Points:

EUR/JPY Technical Strategy: Intermediate-term: congested; short-term: bullish.
EUR/JPY put in an aggressive support break to begin April; but has recovered a portion of those losses over the past four days after bouncing from the 115-zone.
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In our last article, we looked at a bull flag formation that was continuing to hold price action in EUR/JPY. This bull flag had lasted for over three months as the pair digested election-fueled gains. But after a support break of a really big level at ¥120.00, traders were likely going to want to wait for bullish price action to show before plotting strategies for top-side continuation.

That bullish price action never showed up; and as we entered the month of April, worries around French elections helped to drive weakness in EUR/JPY as the pair hurdled-lower by four more big figures. Support eventually showed up just a bit below the psychological level of ¥115.00, after which a momentous rally has taken place to volley price action right back up to another level of interest around ¥117.50. The zone around ¥117.50 is a key area to watch for a number of reasons: Not only is this a psychological level but just a bit-lower at ¥117.46 we have the 50% retracement of the July-December major move from last year; and when prices were falling this area caught three days of support before finally succumbing to selling pressure.

Chart prepared by James Stanley

For short-exposure: this would be the current bias given the veracity of the prior move-lower, and also taken from the fact that the recent rally has yet to cross the 38.2 or 50% retracement markers of that most recent move-lower. Should resistance hold around this zone of ¥117.50, the door could be opened for bearish strategies with eyes on the area around ¥118.50 for stop-placement. Short-side strategies would likely want to incorporate targets around ¥115.90, and ¥115.00 for scaling-out of positions.

Chart prepared by James Stanley

For top-side strategies: Traders would likely want to wait for a bit of confirmation before chasing a move that’s already put in significant run in the effort of controlling risk. Trying to buy a reversal with a +300 pip stop can be a dangerous way of going about matters, so traders will likely want to try to find a way to control risk. This can be done in one of two ways when trading a reversal: 1) Let price action break above resistance, and then look for support to show-up around that same level. This would be around the same ¥117.50 zone. Or 2) trade the move much shorter-term, and look to buy a ‘higher-low’ in the shorter-term move in the effort of taking prices back up to resistance.

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

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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