Analys från DailyFX

GBP/JPY Technical Analysis: Ascending Wedge, Confluent Support Test

Published

8 år ago

9 augusti, 2017

DailyFX

Talking Points:

– GBP/JPY Technical Strategy: Long-Term mixed, Short-Term bearish.

– GBP/JPY tested a confluent zone of support this morning, and this can open the door to strategies on both sides of the pair.

– If you’re looking for trading ideas, check out our Trading Guides. They’re free and updated for Q1, 2017. If you’re looking for ideas more short-term in nature, please check out our IG Client Sentiment.

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After coming into July with considerable strength, GBP/JPY spent most of the month trying to break-above the prior swing-high at 148.46. This high was set in December, just after the Fed hiked rates for just the second time in the past nine years. A subsequent top-side run in April fell short of taking out this level, and we saw this again in July as sellers set-in a ‘lower-high’ at 147.78.

But this hasn’t been an entirely one-sided story; as buyers have been responding to those retracements in the bullish move throughout 2017, and this has created an ascending wedge formation on the Daily chart of GBP/JPY.

GBP/JPY Daily: Ascending Wedge Formation

Chart prepared by James Stanley

As you can see from the above chart, current prices are in the process of testing this bullish trend-line projection. This level is confluent with the 23.6% Fibonacci retracement of the same move, taking the October 2016 low up to the December high. Perhaps more interesting: The 50% and 38.2% retracements from this same move helped to set swing-low support in April and again in June, just before buyers came-in to take control of the situation.

GBP/JPY Daily: Current Support at 23.6% Retracement, 38.2% and 50% Prior Swing-Lows

Chart prepared by James Stanley

This would leave GBP/JPY in a bullish position with the prospect of trend continuation as, at least at this point, prices remain above support and this can be an ideal anchor-point for bullish exposure.

However, as we discussed this morning, it appears as though we’ve seen the initial peek of risk aversion begin to show in global markets. If we do see a continuation of this theme, as driven by concerns around North Korea’s continued nuclear ambitions, GBP/JPY could potentially put in a dramatic down-side break. The British Pound is relatively weak after last week’s BoE meeting, and the Japanese Yen could see continued strength on the build of jitters around potential trouble in Asia.

For those that want to look at bearish strategies in GBP/JPY, they’d likely want to wait for a bit more information before looking to push that theme. A down-side break could open the door for bearish exposure, as bears taking control and driving below this morning’s swing-low of 142.24 could signal more pain ahead. Conversely, traders can look for ‘lower-high’ resistance below the prior swing-low of 144.00. If prices break-above 144.00, the bearish thesis will no longer look attractive, and traders would likely want to re-shift compasses back-towards a bullish direction.

Chart prepared by James Stanley

— Written by James Stanley, Strategist for DailyFX.com

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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

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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