Analys från DailyFX

GBP/JPY Technical Analysis: From Congestion to Expansion (Megaphone)

Published

8 år ago

1 mars, 2017

DailyFX

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Talking Points:

GBP/JPY Technical Strategy: Intermediate-term: Congested, short-term: Expansionary pattern (megaphone).
GBP/JPY finally broke out of the month-old wedge, but sellers were unable to create significant drive sub-139.00.
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In our last article, we looked at the continued congestion in GBP/JPY as the pair moved deeper-and-deeper into a symmetrical wedge pattern. For a pair that is traditionally a volatile fast-mover, such congestion can come-in as daunting to price action traders. Because when that wedge inevitably breaks, there could be significant follow-thru as a build of buyers or sellers could take over after the wedge yields.

That did not happen here. After we warned of persistent resistance in GBP/JPY two weeks ago, bears continued to drive prices-lower, eventually breaking below the under-side of the wedge pattern. And sellers were even able to continue driving-lower, albeit temporarily, as the psychological level at ¥140.00 came into play. Just yesterday morning, we saw another lower-low print but, again, this was met with considerable buying pressure shortly thereafter; making the bearish side of GBP/JPY look considerably less-attractive after the bottom-side break of the wedge.

Chart prepared by James Stanley

Shorter-term, what we have here is a ‘megaphone’ pattern, accented by price action putting in both higher-highs and lower-lows:

Chart prepared by James Stanley

To trade the megaphone, we can look for a break above the previous level of resistance at 140.61 to denote top-side continuation potential. Given the failure of bears to significantly drive price action-lower after the symmetrical wedge broke, we may be seeing a situation in which sellers are beginning to dry-up on a longer-term basis, so the top-side of the pair could be favored despite this seemingly direction-less series of patterns. Also contributing to the interest around this level at 140.61 is the fact that the prior resistance swing took place at the under-side of the prior symmetrical wedge; so if we get price action running above this level, we’ll not only have higher-highs, but a top-side resistance trend-line break.

Chart prepared by James Stanley

Alternatively, on the underside of current price action is a 35-pip zone of potential support, running from ¥139.27 up to ¥139.63. This zone has seen prior breaches below, so this should still be handled delicately; but should buyers show up to support another visit to this zone, top-side setups could be sought with relatively tight stops, targeting that same level of resistance at 140.61.

— 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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