Analys från DailyFX
EURUSD
What’s inside:
- EURUSD carves out key reversal bar on the weekly at the hand of a strong U.S. jobs report
- Rising wedge on 4-hr breaks, first lower low since June
- Trading levels under consideration on both top and bottom-side
Looking for a longer-term view on EURUSD? Check out the Q3 Forecast.
Last week, EURUSD started out on a strong note by briefly pushing through the 2010 low at 11876 on two different days, but each day it was unable to sustain above. Leading into the U.S. jobs report on Friday the euro was putting in a rising wedge on the 4-hr timeframe which provided a warning that we could soon see a downdraft if the underside of the pattern was broken. The all-around solid jobs report gave the US dollar a shot in the arm across the board. Not only was the bearish rising wedge triggered, but for the first time since June we saw a lower-low develop on the 4-hr. This puts us on alert for a bearish sequence to begin developing marked by a failure to rally and develop a lower high and then subsequent lower lows. The first area to look for the euro to struggle is roughly where it closed the week near the vicinity of 11775/800, and even if it can rise above this first level of resistance if the trend is to turn lower it shouldn’t be able to gain traction above 11850.
EURUSD: 4-hr
Pulling back to the weekly chart, a key reversal bar was carved out giving indication that last week could have been a week of exhaustion in the trend. It may not turn out to be ‘the’ top in the euro, but a correction or sideways consolidation looks like the best-case scenario for the foreseeable future. It would require a strong push back above last week’s high over 11900 to possibly re-ignite a bullish outlook.
In total, the combination of a major weekly reversal bar and break in a trend which has been extremely persistent for so long suggests the path of least resistance moving forward will be lower. On the way down in terms of support there is the 8/2015 high at 11714, 11650, and 11612, followed by the trend-line extending higher from the April swing-low.
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—Written by Paul Robinson, Market Analyst
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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
You can receive Paul’s analysis directly via email bysigning up here.
You can follow Paul on Twitter at@PaulRobinonFX.
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
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
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