Analys från DailyFX

GBP/CAD: 60 More Pips That Are Tougher to Tackle

Published

11 år ago

30 oktober, 2013

DailyFX

Talking Points:

The Sharp GBP/CAD Downside Move
Consolidation Before Another Potential Push Down
Conflicting Elliott Wave Signals to Contend with

The downward GBPCAD move discussed earlier this week is moving along quite well so far in spite of the reasons for caution we highlighted initially.

See original: A “Textbook” GBP/CAD Pattern with a Hidden Twist

As seen in the chart below, the current profit level on that trade would now be approximately equal to the risk taken.

Guest Commentary: An “Eye-Catching” GBP/CAD Move

It is the speed of the move down that is eye-catching, however, particularly because price has already broken the rising trend line support levels.

Consolidating where it is now suggests that although some upward pullback is likely, there should be at least one more push down.

Guest Commentary: Another Push Down for GBP/CAD

Due to the risk factors cited earlier for that trade, however, caution is still a top priority, and as a result, only an intraday trade should be attempted at this point.

In that regard, there are two conflicting Elliott wave counts on the four-hour and hourly charts that could be of particular interest.

Guest Commentary: Conflicting GBP/CAD Elliott Wave Counts

The four-hour Elliott wave count has been identified in the above chart for enthusiasts only. For those who wish to understand the bottom line, the hypothetical projected move is the jagged black arrow labelled with “b” and “c.”

The key point here is that according to Elliott wave projections, price could potentially move down to find support between the 50% and 61.8% Fibonacci retracement levels at 1.6642 and 1.6703. To be conservative, this zone has been slightly enlarged to 1.6614-1.6724 in order to account for previous price-based support and resistance.

Essentially, the analysis suggests that there could be at least 60 pips of additional downside to this move. The important question, however, is how to capture that potential move?

Guest Commentary: Conflicting GBP/CAD Elliott Wave Counts (cont’d.)

The wave count on the GBPCAD hourly chart is far less certain, as wave 5 may not represent the low. Nonetheless, on pure support and resistance principles, we have an estimated resistance zone around the wave 4 high in the area of 1.6816-1.6835.

This is extremely small in relation to the move that could develop. Although price could run straight down without going up to test that level of resistance, the move is a little doubtful on the daily chart, so a more defensive stance is preferable here, even if it means missing the potential move.

Alternatively, price could go down to make a new low (new wave 5) before pulling back up to this resistance, and that scenario would be tradable as well. Since this zone is anchored around previous price action, the resistance zone would still be valid. Of course, if price moves straight to the projected support zone, then the opportunity would be negated.

This is essentially an intraday trading opportunity using a 15-minute chart where an early entry and nimble trade management would be required. As usual, pin bars, engulfing bars, reversal patterns, and divergence would all be potential reasons to enter when price pierces that key resistance zone.

By Kaye Lee, private fund trader and head trader consultant, StraightTalkTrading.com

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

Confidence is essential to successful trading, see this new guide – ’Building Confidence in Trading’.

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