Analys från DailyFX

GBP/JPY Technical Analysis: Buckle Up Before BoE

Published

8 år ago

2 februari, 2016

DailyFX

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Talking Points:

GBP/JPY Technical Strategy: Flat
GBP/JPY put in a 2,400 pip move lower, and has since retraced 1,000 pips. This is a very volatile market, especially right now.
GBP/JPY is traditionally very volatile, but with huge fundamental issues for both represented economies, this pair can put in significant movement in the coming weeks. Make sure your risk management has been addressed before dabbling with ‘The Dragon.’

GBP/JPY has a few nicknames of note, one being ‘The Dragon,’ and the other being ‘The Widow-maker.’ Both nicknames denote the penchant for volatility that will often be found in this pair, and the past two months have been nothing short of astounding, even in GBP/JPY terms. From the beginning of December to mid-January we saw GBP/JPY rip off 2,400 pips to the down-side; and then after support came in around the middle of January, we’ve seen the pair move higher by more than 1,000 pips; and this can still be classified as a ‘retracement.’

With Japan having recently moved into ‘negative rates’ territory combined with the growing sentiment around an increased possibility of a Brexit, and with a Bank of England meeting on the docket for this Thursday, the potential for heightened volatility remains. And in GBP/JPY, that means any trader taking a position should take notice.

In the near-term, the top-side momentum is notable. We’ve basically seen 500 pips of run since Thursday’s close. That’s not something you want to directly fade unless you have a really strong resistance level to trade it off of, which I don’t. Not yet anyways. There’s a major psychological level at 175, a 50% Fibonacci retracement of the most recent major move at 176.37, and a 61.8% Fibonacci retracement of the secondary move in the pair at 178.03 (taking the 2008 high to the 2011 low). But there hasn’t been much signs of slowdown in this move higher yet, and there are no indications of resistance setting in. So, traders that are looking to get short GBP/JPY would likely want to wait for that resistance to develop in one of those price zones, and this can be found by looking for top-side wicks on the hourly or four-hour charts.

On the top-side, we’ve seen intra-day support develop in the 173.50-vicinity, which was also a previous swing-high. The 38.2% retracement of that most recent major move comes in right at 173.45, and traders can potentially use this as an entry level for top-side plays. Similar logic would be needed, as in traders would likely want to wait for support to develop at this price on the hourly or 4-hour charts before triggering long. This could open the door for targets at 176.37 and then 178.03. If we can break above 178, which in GBP/JPY, anything is possible, then additional targets could be cast towards 179.30 and then 180.00.

Created with Marketscope/Trading Station II; prepared by James Stanley

— Written by James Stanley, Analyst 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

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