Analys från DailyFX

FTSE 100 in Limbo, Pound Not Helping

Published

8 år ago

3 maj, 2017

DailyFX

What’s inside:

FTSE 100 caught between key levels of support and resistance, global laggard
British pound strength not helping
Key levels/lines outlined

For a longer-term view on the FTSE 100, or another market of interest, see our quarterly forecast.

This is what we had to say on Friday in regards to the technical posturing of the FTSE 100: “We’re stuck between a rock and a hard place; not yet at support, but resistance looms overhead. Risk/reward from either side of the market is lacking, and on that the sidelines look like a comfortable place to be.”

Nothing has changed. The zone from ~7255/300 continues to act as resistance; yesterday’s high was 7254 and the market is turning down so far today. Looking lower, a break of the Monday low at 7197 will likely lead to a test of the June trend-line currently around 7155 and rising.

Risk appetite, globally, is healthy – the DAX is quietly consolidating in record territory, the SP 500 is hanging out just below the March 1 record high, and the Nikkei 225 has even joined in lately with a strong push towards its best levels of 2017 (market closed for holiday).

And the FTSE 100? Not looking so healthy; ‘Brexit’ and British pound strength are at work here. The one-month correlation between GBPUSD and the FTSE is a statistically significant -71%. What’s good for the pound is bad for the 100-index given the majority of its constituents’ earnings come from outside of the UK; when profits are converted back into pounds these companies get a currency conversion boost. On this end, GBPUSD looks like it wants to continue to rise, and if that is the case then the footsie will be served no favors by the currency market.

Moving back to the technical landscape, expectations are for the market to continue to bounce around between beforementioned support and resistance before eventually coming to a resolution. A strong push above 7300 will bring the trend-line off the record high into view, along with the trend-line running overhead since 2013 (it’s put a lid on the market on several occasions since January). On the down-side, a break of the June trend-line will quickly bring the important 7100 area into play. A clean break below 7100 would be a rather bearish occurrence, especially if it is doing so without any downside participation from elsewhere in the globe.

FTSE 100: 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