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FTSE 100 To Bounce Back in Same Vein as the DAX 30?

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The FTSE 100 is slightly higher in today’s trading session and has so far shrugged off the fact that Chinese industrial production, published overnight, failed to meet expectations and the year-on-year is as soft as it was back in March 2015, which is also the weakest level since 2008. The outcome was 5.6% vs. the 5.8% YoY expected.

My GDP estimate which is solely based on industrial production suggests that GDP growth is near 6.2% YoY for the month of October. The latest official reading for GDP was 6.9% YoY. Please see our chart below.

On the other hand, a separate report showed China auto sales gained the most in 10 months and the primary reason for this boost is said to be a reduction in car-purchase tax. This trend is also expected to increase according to Don Yang, Secretary General of the Chinese Auto Association. We also note that Chinese retail sales increased by 11% vs. the 10.9% YoY expected.

Commodity markets, which are oversold, have not reacted to this Chinese news and are stabilizing after the last few weeks of decline, which is in turn helping the FTSE 100 to remain above the 6250 support level. There is no major data on deck in today’s session.

Technical Outlook Remains Bullish

Price remains trapped within the 6250 – 6487 range, a range which we have unfortunately gotten all too familiar with.

As a momentum trader, I would not go long at the current level, but rather I would wait for a break to this range and provided we trade above 6250, the FTSE 100 may reach 6400 in the next few days and rally, much like the DAX in today’s session.

FTSE 100 To Bounce Back in Same Vein as the DAX 30?

Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano

Chinese GDP Remains Soft According to Industrial Production

FTSE 100 To Bounce Back in Same Vein as the DAX 30?

Data: Bloomberg, Own Calculations

— Written by Alejandro Zambrano, Market Analyst for DailyFX.com

Contact and follow Alejandro on Twitter: @AlexFX00

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EURUSD Weekly Technical Analysis: New Month, More Weakness

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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

EURUSD Weekly Technical Analysis: New Month, More Weakness

—Written by Paul Robinson, Market Analyst

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You can follow Paul on Twitter at@PaulRobinonFX.

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Euro Bias Mixed Heading into October, Q4’17

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Euro Bias Mixed Heading into October, Q4'17

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

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British Pound Reversal Potential Persists Heading into New Quarter

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British Pound Reversal Potential Persists Heading into New Quarter

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

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