Analys från DailyFX
FTSE 100 Tech Update: Big Line of Former Resistance to Turn Support on a Dip
What’s inside:
- FTSE 100 slashes through significant trend-line resistance, trades to new record highs
- Old resistance to turn new support
- Looking higher, January/March top-side trend-line may act as next stopping point
See what’s driving sterling and the FTSE 100. See our market forecasts for details.
On Friday, when we last took a look at the FTSE 100 we were focused on the 2013 trend-line which the index was trading up against, but now well above as the footsie moves further into record territory. Given the trend-line’s influence since January it was viewed as a more significant point of resistance than the March record high. Now that it’s been overcome, as per usual – old resistance becomes viewed as new support.
The FTSE is extended in the short-term, having risen in a fairly relentless fashion since the end of last month. With that said, though, there is no interest on this end in making a wager against the market; picking tops is a business we’ll leave to others. On a short-term correction we will look to a couple of sources of support as potential opportunities for ‘would-be’ longs to join the trend higher. First, the old high at 7447 may keep the market buoyed, but the potential source of support which has our most attention is the 2013 top-side trend-line. Given how well it kept a lid on the market on several occasions since January, it appears likely it will put a floor in on any weakness we may see in the coming days. It’s possible the trend-line rising up from the April low also collides with the ’13 t-line, further fortifying support for the market. In the event the market reverses hard through noted support we would need to reassess.
Looking higher, there is a top-side trend-line crossing over peaks in January and March which we will keep an eye on as resistance. It’s only viewed as a minor inflection point at this time given it is running higher with the market, but should the footsie continue to extend into this line from here without taking a rest it will increase the likelihood of seeing a pullback or consolidation develop at that juncture.
FTSE 100: Daily
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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
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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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