Analys från DailyFX

GBP/JPY Technical Analysis: Tug-of-War at the ’Brexit-Low’

Published

9 år ago

8 augusti, 2016

DailyFX

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Talking Points:

GBP/JPY Technical Strategy: Longer-term down-trend attempting to carve-out higher-low support.
After the out-sized reversal in the Yen followed by the monetary bazooka triggered by the BOE, GBP/JPY saw a big move lower, but respected the longer-term lows that printed in the week following the Brexit referendum.
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In our last article, we looked at GBP/JPY price action near a confluent support-zone in the 135-region. And given that a large portion of that movement-lower took place after the Bank of Japan had underwhelmed at their most recent rate decision, it made sense that we were likely seeing stimulus bets come out of the Yen. But with a Bank of England rate decision carrying a near-100% probability of a rate cut in the days following, it also made sense not to push a ‘square peg into a round hole’ by trying to buy GBP-assets ahead of that announcement.

The Bank of England did not disappoint: They unrolled a veritable bazooka of stimulus with more than even the most aggressive forecasts were looking for. And as many would expect, this brought-on a quick dose of GBP-weakness, sending GBP/JPY flying below the ‘Brexit low’ at 133.20; which had held as ‘swing-low’ support in GBP/JPY until the week following Brexit, in which Mark Carney drove the Sterling lower by talking-up proactive rate-cuts for the economy on the heels of the referendum.

To close last week, price action in GBP/JPY had trickled back up to 133.20 to find near-term resistance. And the open this week saw prices gap above this level, only to move down to find short-term support at old resistance.

While many are still extremely bearish on GBP given the expectation for even more rate cuts down-the-road, the possibility still exists for the Bank of Japan to ramp-up their stimulus program, and any clues, hints or innuendo of such a theme from Japanese politicians/Central Bankers will likely re-fire this prospect. This was a large driver behind the theme of Yen-weakness in the first half of July, and while the BoJ underwhelmed at their most recent meeting, this certainly does not preclude the bank from doing more in the future; and we’ll likely see market participants building expectations for such a theme as we move towards the bank’s next meeting in September.

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

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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