Analys från DailyFX
FTSE 100 Technical Outlook: It’s All About 7300
What’s inside:
- FTSE 100 has confluence of support growing, with the 200-day MA added
- Repeated tests of 7300 weaken with each attempt to break, a close below would be big
- Support is support until it isn’t, still remains a range-bound market for now
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Last week, when we took a look at the FTSE 100 it was on the verge of breaking down amidst a ‘risk-off’ move in global markets, but major support held (again). The 7300-level and February 2016 trend-line have done a good job so far of keeping the market propped up after the footsie was rejected a month-ago near the June record high. The amount of support in the vicinity of 7300 has grown with the addition of the 200-day moving average quickly rising up.
The previously mentioned rejection near old record highs could still turn out to be a double-top in the event we see the neckline (7300) cleanly breached. Yesterday, the market made another attempt at breaking the level but managed to recover and hold onto not only big horizontal support, but the longer-term trend-line too. If there is a market which is currently flirting with a major technical failure, it’s the UK. Repeated tests of critical support suggest it may not be long before we see a break. Each visit of support weakening it just a little more.
But before assuming it will break, we must maintain that support is support until it isn’t. This view at least points to a market with a neutral bias for now, even somewhat positive at the moment. However, should we see strength from here it won’t be long before the mid-7400s become a problem to overcome. Range-bound conditions continue to dominate trade, making it a market for traders looking to fade levels until something gives.
Should we see a daily closing bar below all recent lows (7289 was the 8/29 low), then all support (’16 trend-line, 7300, 200-day) will have been broken. This would likely usher in a move towards ~7100 and worse. But, again, we must wait for confirmation before getting overly aggressive from the short-side. Looking higher, it will take a move above recent highs in the mid-7400s to spur upward momentum, but even then, given levels not far above, conviction in the rally will be low.
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.
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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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