Analys från DailyFX

EURUSD Options-Implied Range Heading into FOMC

Published

7 år ago

26 juli, 2017

DailyFX

What’s inside:

EURUSD one-day implied volatility suggests limited movement on FOMC, but leaves room for a surprise
One-day one-standard deviation high arrives at yesterday’s reversal-day high
Top-side one-week projection could be exceeded if yesterday’s key reversal is negated, lead to final thrust in euro, DXY into support

Looking for a longer-term view on EURUSD? Check out our Q3 Forecast.

In the following table, you’ll find implied volatilities for major USD-pairs for one-day and one-week time-frames. Using levels of IV, we’ve calculated the projected range-low/high prices from the current spot price within one-standard deviation for specified periods. (Statistically speaking, 68% of the time price should remain within the lower and upper-bounds.)

EURUSD one-day implied volatility suggests limited movement on today’s FOMC announcement; be alert for a surprise.

Later today, at 18:00 GMT the Fed is expected to hold on interest rates, and on that the focus, barring a major surprise, will be on the policy statement and any significant signaling for the September meeting. Currently, as per Fed Fund futures, there is less than a 10% probability priced in for a hike at the next meeting, and a near 50/50 split on December. With the US dollar drowning and stocks continuing to forge on to new record levels, despite the Fed leaning on the hawkish side, markets across the board aren’t taking a September hike seriously. One-day implied volatilities are elevated heading into today’s outcome, but nothing significant. At 11.45%, EURUSD one-day is implying a 68% probability that price stays between 11572 and 11712. If the market has it right, then today will be a relatively non-event. However, if the Fed provides strong indications that another hike is in the cards in September then markets will be caught off guard and could quickly reprice assets accordingly.

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The projected one-standard deviation high (68% probability of staying below) clocks in at 11712 from the current market price, which is precisely yesterday’s reversal-day high. Looking lower, the projected day-low comes in at 11572 and roughly aligns with the 7/18 day-high at 11583.

Looking beyond today, one-week implied volatility is priced relatively low at 7.32%, and suggests the euro is more likely than not to hold below 11760 and above 11524. EURUSD is extended and in an important area of resistance between the 2016 high and August 2015 high. This makes for an interesting spot to look for a reversal to take shape. Yesterday’s reversal-day could have been the beginning of a retracement if not possibly more. But if it doesn’t prove to be a worthy reversal then we could see the euro continue to surprise to the upside. If this is to be the case the one-week high could be at risk of becoming exceeded and the top-side parallel connected to the April trend-line may come into play over 11800 and the 2010 low at 11876. This would likely see the DXY down to the 92/93 zone where major long-term support lies and would offer a spot to look for the dollar to rebound and the euro to experience a material reversal.

For other currency volatility-related articles please visit the Binaries page.

EURUSD: Daily

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—Written by Paul Robinson, Market Analyst

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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

You can receive Paul’s analysis directly via email bysigning up here.

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

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