Analys från DailyFX

GBPUSD Options Point to Quiet Week, but Watch for Continued Weakness

Published

8 år ago

7 augusti, 2017

DailyFX

What’s inside:

GBPUSD had a fake-out breakout leading to a breakdown following key events
Path of least resistance is lower, with support around 12930 eyed as next target
One-week implied volatility drops below 7%, suggests muted movement; projected low aligns with support

Looking for a longer-term view on GBPUSD? Check out our Q3 Forecast.

In the following table, we listed levels of implied volatility (IV) for major USD-pairs looking out over one-day and one-week time-frames. Using implied volatility, we calculated the projected range-low high prices from the current spot price within one-standard deviation for specified periods. (Statistically speaking, there is a 68% probability that price will remain within the lower and upper-bounds.)

GBPUSD one-week implied volatility declines, pattern failure points to further weakness into support

Last week, GBPUSD was heading higher out of an ascending wedge formation prior to the BoE on Thursday, but following the meeting it was hit with aggressive selling pressure. Friday’s upbeat U.S. jobs report sent the US dollar rallying versus all major currencies. This pushed cable down below the bottom-side of the ascending wedge formation, which when looked at in total accounted for a week where we saw a fake-out breakout to the top-side and then a failure through the bottom of the formation. This sequence tends to lead to further selling over the short-term if not longer.

With that in mind as a baseline scenario, we’re looking to the next spot where buyers might step in. GBPUSD has fairly substantial support near 12930. With this week holding few scheduled data releases of significance, one-week implied volatility has slipped to the lowest level among the major currencies at only 6.93%. This suggests price movement for the week will be relatively muted. The projected one-week one-standard low based on the current spot price clocks in at 12921, in close alignment with support. Even though expectations are for lower prices, selling may be cut short of anything significant once support a short distance below is met. A drop below support would quickly bring into play the March trend-line approximately another 60 pips lower.

For other currency volatility-related articles please visit the Binaries page.

GBPUSD: Daily

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—Written by Paul Robinson, Market Analyst

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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

You can receive Paul’s analysis directly via email bysigning up here.

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