Analys från DailyFX
FTSE 100
What’s inside:
- The FTSE 100 trades well below the 6955/18 resistance zone
- Market to remain heavy, minor and more significant levels outlined
- High Court Brexit ruling, BoE later on, no changes expected; focus will be on inflation report and statement
The other day we were looking at the bearish sequence of lower highs and inability for the FTSE 100 to garner any buying interest as it sat on important support in the vicinity of 6955/18. From Tuesday’s post:“A daily close below 6918 would put buyers on their heels while giving sellers reason to press more aggressively.” Tuesday’s poor close just under the bottom-side of support led to yesterday’s 1%+ sell-off, with global stock markets weighed down across the board.
The first level of noted support is close at hand by way of the lower parallel (~6835) married to the trend-line running off the 10/11 high. It’s considered a minor level of support, though, given the few inflection points on both the top and bottom-side trend-lines and overall downward trend. Nevertheless, we will take interest in seeing how the market responds there today. The first level of price support doesn’t arrive until the 9/27 low at 6769. Below there, with aggressive selling, we will look to the 9/15 swing low at 6655.
Given the FTSE is trading below the important 6955/18 zone which previously kept it afloat, it is anticipated in the near-term that sellers will keep a lid on the market at those levels should it rise so far.
FTSE 100: Daily
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Heads up: Later this morning at 10:00 GMT the High Court is set to give their ruling on whether or not Theresa May has the right to bypass Parliament in triggering the UK’s exit from the EU. At 12:00, the BoE is expected to stay on hold with rates (0.25%) and the asset purchase target (£435b), placing the market’s attention on the quarterly inflation report and policy statement. Sign up for the BoE Rate Decision live event with Christopher Vecchio.
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—Written by Paul Robinson, Market Analyst
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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.
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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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