Analys från DailyFX
FTSE 100 Revisits Its Weekly Low
Talking Points
- FTSE 100 slid on what to appears to be an adjustment to overnight declines in Asian stock markets.
- BoJ inaction generates stock market turmoil.
- FTSE 100: Over the last 24 hours, this week’s low of 6248 has been supporting price, while the 6343 level capped the price (yesterday’s high).
At the time of writing, the FTSE 100 (CFD: UK100) was lower by 1% on the day. The price slide appears to be an adjustment to overnight declines in Asian stock markets. The Nikkei 225 was down by 3.61% when trading closed for the day in Japan, a decline, which was generated by the outcome of the BoJ Rate Meeting Decision.
The Japanese Central Bank opted to leave its policy rate at -0.1% and did not extend its stimulus package to include negative rate bank loans. Bloomberg news reports that a slight majority of economists surveyed had projected some sort of change to the BoJ monetary policy. The Financials sectors in Japan was the most badly hurt, down by 5.79% on the day.
Technically, FTSE 100 (CFD: UK100) has been trading lower since mid-last week when the price reached a high of 6432. Over the last 24 hours, this week’s low of 6248 has been supporting price, while the 6343 level capped price (yesterday’s high).
Below this week’s low of 6248, the next support level is the April 11 low of 6162 and followed by the April 7 low of 6104. Resistance levels are yesterday’s high of 6343 and last week’s high of 6432.
No U.K. market moving events are on deck today.
Today, the German Preliminary Consumer Price Index report is published. A Bloomberg News survey projects the inflation rate to rise by 0.1% YoY, which would be a step back from the 0.3% rise in March. The report is important as its influences the monetary policy of the ECB, which in turns affects economic growth in the Eurozone. In the afternoon, focus shifts to U.S. GDP and Jobless claims. See our economic calendar.
Our Stock Market forecasts for Q2 2016 are now live on the site. Download them for free.
FTSE 100 | CFD: UK100
Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
— Written by Alejandro Zambrano, Market Analyst for DailyFX.com
Contact and follow Alejandro on Twitter: @AlexFX00
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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