Analys från DailyFX
FTSE 100 Indecisive in Short-term, Long-term Trend Still Clear
What’s inside:
- FTSE 100 choppy near-term price action making for tough trading
- Intermediate to long-term outlook remains constructive
- A big-picture bullish outlook warranted until a break in trend develops
How is ‘Brexit’ expected to impact the FTSE 100 and Sterling in Q3? Find out here!
Short-term price action amongst global indices hasn’t been the cleanest as of recent, and when it comes to the FTSE 100 that has been especially true. We’ve seen some sizable daily ranges, but with no lasting moves – stop and reverse. We’ve seen good play in recent months around the 2013 top-side trend-line and have discussed its importance at great length, but even that has become an unreliable source of support or resistance. Pretty soon we’ll be removing it as a relevant technical signpost if the market doesn’t start ‘showing it respect’.
When the chop starts (let’s not forget summer trading conditions are in effect, too) it’s a good idea to dial back a bit and look at the market with the big-picture in mind and slow it down. More broadly speaking, we are still seeing a series of higher highs and higher lows going back to last year, and as long as that continues then the intermediate-term trend remains aligned with the longer-term trend. It won’t be until we see a break in this sequence that we need to be concerned (if bullish) and begin sharpening our bear claws for shorts.
For now, from a longer-term standpoint we’ll remain in the bull-camp until we see price action suggest we should do otherwise. In the short-term, keeping trading light is a prudent approach as the market searches for clarity in summer-lightened trading conditions.
Heads up: Later today we have the FOMC rate announcement, and while the market isn’t expecting a change in rates there could be signaling for the September meeting in the policy statement which could shake up the risk spectrum. This could have an impact on tomorrow’s open. Join Chief Strategist John Kicklighter for live coverage of the announcement.
FTSE 100: Daily
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—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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