Analys från DailyFX
EURUSD, USDJPY Projected Daily Ranges into FOMC Meeting
What’s inside:
- One-day implied volatility for EURUSD rises to 17.11%, 1-stdev range of 11896-12110
- One-day IV for USDJPY bumps up to 18.18%, 1-stdev range of 11027-11239
- FOMC announcement set for 14:00 GMT time
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In the following table, you’ll find levels of implied volatility (IV) for major USD-pairs looking out over the next one-day and one-week time-frames. Using these levels, we’ve derived the range-low/high prices from the current spot price within one-standard deviation for specified periods. Statistically speaking, there is a 68% probability that price will remain within the lower and upper-bounds.
EURUSD options implied volatility rises to 17.11%, implies a 1-stdev range of 11896-12110
At 14:00 GMT time, the FOMC will announce its decision on rates, which are expected to remain unchanged. The market’s focus will be on the Fed’s plans with its balance sheet and QE, along with the central bank’s outlook towards future rate hikes. For live coverage of the announcement, join Chief Currency Strategist John Kicklighter at 13:45 GMT.
Based on implied volatility there is a 68% probability that the euro will close somewhere between 11896 and 12110. A pretty sizable range. The latter level if seen could kick off the start of a ‘head-and-shoulders’ pattern we discussed in this morning’s webinar. But we will still need to see a break of the 11825 area (which the one-week projected low aligns with) and the April trend-line before becoming overly bearish. On the top-side, should we see the upper threshold met or exceeded, it would mean a breakout for EURUSD is underway and clearance of the 2012 low. The one-week projected high is at 12163. The one-day levels are in close proximity to the one-week expected range high/low, highlighting the fact that the market pricing in much of the next week’s volatility into the outcome of today’s meeting.
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EURUSD: Daily
USDJPY options implied volatility rises to 18.18%, points to a 1-stdev range of 11027-11239
The projected daily range-low at 11027 is of interest given it roughly aligns with support going back to March. Should we see a move down to that point buying interest may show up. Looking higher, the 11239-projected daily high is not far above the 200-day moving average, possibly undercutting further intra-day momentum. The one-week high is of interest as it aligns well with the trend-line running down off the December high. A move to that level may stall as intermediate-term resistance comes into play.
For other currency volatility-related articles please visit the Binaries page.
USDJPY: Daily
—Written by Paul Robinson, Market Analyst
You can receive Paul’s analysis directly via email by signing up here.
You can follow Paul on Twitter at @PaulRobinonFX.
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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