Analys från DailyFX
FTSE 100 Tech Update: Top and Bottom-side Levels in Focus
What’s inside:
- FTSE 100 continues to rise, pullback risk heightening
- Top-side resistance in form of trend-line back to Oct 2015
- Support at prior record high breakout levels
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On Thursday, we discussed the increasing risk of a decline hatching in the FTSE 100 despite the impressive persistence of the rise dating back to 12/2. It’s been the most stable market when looking at the major players in the global spectrum, but momentum is showing signs of stalling as the UK index is only a few points higher than where it was at the high of the day on the first trading day of the year.
We see no reason to be immediately bearish the FTSE, though, but as we said last week, and we’ll say it again, the index is in need of a pullback or consolidation period in order to alleviate overbought conditions; this will also improve risk/reward for new long positions. From a price action perspective, there isn’t anything clearly bearish, but it’s not a bad idea to implement a trailing stop strategy to protect profits at this juncture.
A level, or line rather, of resistance we are watching arrives around the 7300 handle. The top-side trend-line extends back across peaks in October of 2016 and 2015. It’s not considered a significant level of resistance, but should the market reach up to this line without first pulling back, it might be all that is needed to put a lid on the market in the current state of extension. At that point, aggressive traders may look to take a crack from the short-side. We’ll discuss further should the market rise to that point in the days to come.
A ‘buy-the-dip into support’ approach is preferred at this time. The first major area of support arrives at the prior record highs (intra-day high – 7104, closing – 7130). A move back into this zone could offer up a solid opportunity to join the trend higher, or at the least a spot for very short-term traders to enter from the long-side with in mind that a bounce develops initially.
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
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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