Analys från DailyFX

GBP/JPY Technical Analysis: New Trend in Play after 800-Pip, 3-Day Romp

Published

9 år ago

11 november, 2016

DailyFX

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Talking Points:

GBP/JPY Technical Strategy: Intermediate term-price action turning bullish after 800+ pip run over past three days.
The range in GBP/JPY has finally resolved itself after an aggressive top-side break.
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In our last article, we looked at GBP/JPY while it was suspiciously trading in a 200-pip range. Suspicious because this is GBP/JPY; and ranges are the exception and not the rule. And with such a context, trading a range can be dangerous as there could be a higher probability of getting a stop gapped through, which can completely throw off a trader’s potential risk/reward when there’s a chance that the risk is actually greater than expected. So rather than trying to trade a range in a traditionally volatile pair, we wanted to wait for signs of a new trend to present itself and that may be what we’ve seen over the past three trading days.

As news of Donald Trump’s likely win made its way through markets, risk aversion began to show as the ‘shock factor’ of a Trump win caught many by surprise. This drove GBP/JPY lower by 350 pips, right back down to the support zone that we had looked at in that prior range. But at around Midnight Eastern Time, ‘risk off’ turned into ‘risk on’ in a very big way, and GBP/JPY began to shoot-higher, and hasn’t really shown any signs of stopping as prices have moved higher by more than 800-pips off of Wednesday’s low.

At this point, we’ve seen multiple points of resistance broken and the pair is trading at a two-month high. The fundamental backdrop behind GBP/JPY could support a continuation of higher prices after the Bank of England reversed their prior dovishness in respect of rising inflationary pressures, and this can provide an accommodating backdrop for the development of a new up-trend.

At this point, traders will likely want to wait for support before looking to trigger long, as the prior swing is now more than 800-pips away. Price levels at 133.20 (the Brexit swing-low) or 131.75 (the most recent swing-high) could offer areas in which a ‘higher low’ in the pair could develop.

A bit deeper at 130.00 we have a very interesting area of confluence, as a long-term trend-line projection has continued to offer support/resistance inflection and also aligns with a pivotal psychological level. This trend-line can be found by connecting the low in September of 2011 with the low in June of 2012. The projection of this line runs into current price action, and is shown below in red with recent inflections indicated with red boxes. Should prices correct down to this level, the long-trade can still be investigated; but if we get a significant break below that zone, the bullish bias should come into question as prices action moves back below this long-term trend-line of support.

Chart 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

8 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

8 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

8 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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