Analys från DailyFX
FTSE 100 Technical Analysis: Ascending Wedge Nearly Complete
What’s inside:
- Trading in the FTSE 100 remains choppy
- Ascending wedge near triggering
- FOMC later today, may have an impact on global stock markets
The FTSE 100 has made little head-way in the past two weeks after the monster rebound off the ‘Brexit’ day low. It appeared as though a pullback may develop following the reversal-day back on 7/14 at resistance created in August 2015, but so far following a one-day dip after the reversal event the FTSE has done little but chewed its way sideways.
Despite the FTSE struggling to trudge higher, there has been little reason to short the low volatility grind. It appears to be a combination of typical price action following extremely volatile swings, summer trading, and no significant catalyst to spur market participants.
The hourly chart shows the 100 working its ways towards breaking out of an ascending wedge. The depth of the triangle points to a measured move of ~130 points, which could take the FTSE up to around 6875, and if it were to trigger to the downside, ~6580. The ascending nature of the pattern within an uptrend suggests it should breakout to the upside, but a downside break is always possible, especially given resistance at hand. It is best to wait for these patterns to trigger before making a commitment.
Resistance levels on a further climb are at last July and June swing highs of 6813 and 6874 (matching ascending wedge MM), respectively. Support comes in around 6610, then just beneath 6500 lies a one-year support zone of about 80 points or so which the market broke through on June 30 when Carney suggested the BoE would provide needed accommodations to the market.
Later today the FOMC will release its decision on interest rates and monetary policy statement. There are no expectations of the Fed raising rates, so the market will be focused on language changes which may provide indications on the timing of another possible rate hike. Depending on how risk sentiment in the US plays out following the release, global equity markets could find themselves impacted in the next day of trading.
Watch trader positioning in real-time via the ‘Speculative Sentiment Index’.
—Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX.
You can email him directly at probinson@fxcm.com with any questions or comments.
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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