Analys från DailyFX

FTSE 100 – Twin Reversal Bars Shifts Focus Lower Ahead of Election

Published

8 år ago

5 juni, 2017

DailyFX

What’s inside:

FTSE 100 posted double key reversal bars at important resistance, weekly ‘doji’ confirms bearish implications
April trend-line soon in play, drop below clears path towards major source of support
Larger bearish pattern could come into view, but for now focused on one of two scenarios playing out in the short-term

Find out what’s driving Sterling and the FTSE 100 in our market forecasts.

Last week, we were again discussing the importance of the top-side trend-line running over highs since January. Given the trend-line is running in the direction of the trend we initially viewed it last month as only minor in significance, however; it has been quite a struggle to overcome. It’s been upgraded from ‘minor’ to ‘major’. Twice last week the FTSE attempted to trade above but was swiftly rejected, putting in a pair of daily key reversal bars. The three rejections since the middle of last month, with the last two coming just a couple of days apart suggests we may soon see a move lower. On the weekly time-frame, a perfect ‘doji’ was formed with the open and close arriving at the exact same price – this confirms the bearish implications of the twin daily reversal bars.

The trend-line running up from the April low is keeping the footsie supported in the near-term. A drop below trend support will likely bolster downside momentum towards a major source of support at the 2013 top-side trend-line; a line which previously kept a lid on the market for several months until turning into support last month. It currently clocks in just above 7400. A drop and hold of the long-term line will be rather critical for keeping the market afloat given the potential for a bigger picture topping pattern if the market were to drop aggressively.

It’s too early to make this call, but should sellers show up in earnest and push the FTSE sharply lower towards 7100, a ’broadening top’ pattern could come into play. A ’broadening top’ is marked by higher highs with a flat bottom. Rallies of increasing size which fail repeatedly point to instability in the trend. It’s implications upon a confirmed break (below 7100) would be fairly ominous.

But before we get too far ahead of ourselves, though, focus is on the converging Jan/Mar top-side trend-line and rising trend support from April. A break below the April trend-line will put the short-term path of least resistance in favor of shorts. If the FTSE can hold and close above the top-side trend-line and negate last week’s pair of reversal bars, then we will shift our focus back towards seeing higher prices. One of these two scenarios look likely to play out very soon, with the first one viewed as the most probable.

Keep in mind: The UK General Election is on Thursday, and opinion polls will be released from now until then as well. Traders should be prepared for erratic price swings.

FTSE 100: Daily

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—Written by Paul Robinson, Market Analyst

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Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

Published

7 år ago

30 september, 2017

DailyFX

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.

Analys från DailyFX

Euro Bias Mixed Heading into October, Q4’17

Published

7 år ago

29 september, 2017

DailyFX

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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Analys från DailyFX

British Pound Reversal Potential Persists Heading into New Quarter

Published

7 år ago

29 september, 2017

DailyFX

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

To be added to Christopher’s e-mail distribution list, please fill out this form