Analys från DailyFX

GBPUSD Projected One-week Range-high at Greater Risk of Breaking Than Range-low

Published

8 år ago

19 juli, 2017

DailyFX

What’s inside:

GBPUSD surges to highest levels since September, looking to hold on pullback
One-week projected high doesn’t align with price resistance, at risk of proving IV to price too low
Trading at support, if doesn’t hold look for trend-line support to keep from exceeding projected low

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

In the following table, we’ve noted implied volatilities for major USD-pairs for one-day and one-week time-frames. Through implied volatility, we’ve calculated the projected range-low/high prices from the current spot price within one-standard deviation for specified periods. (Statistically speaking, 68% of the time price should remain within the lower and upper-bounds.)

GBPUSD testing support following breakout, top-side projected one-week level at risk of being exceeded while downside looks ‘protected’

Cable surged on Friday to close at its best levels since September and also carved out a higher-high from the swing-high on the last day of trade in June. This exposes further upside to come in the weeks ahead as long as it can maintain above either the recent break levels (currently testing after yesterday’s miss on inflation data), or the trend-line rising up from last month’s low. The projected one-week high within one-standard deviation clocks in at 13163 and doesn’t align with any visible price resistance. If GBPUSD is to continue on higher this projected range-high may easily be exceeded, suggesting one-week implied volatility is underpriced at 7.05%.

As already stated, support above 13000 is undergoing a thorough test and is the first area we look for cable to hold in an attempt to shake off yesterday’s weak data. There has been a weak dollar theme in place for some time now and that may be enough to help keep sterling boosted against the buck (there are two sides to the coin as we discussed in this morning’s webinar).

In the event support close at hand doesn’t hold the next area of support is the trend-line extending higher from the June low, which arrives above the projected one-week low of 12909. Even though sustained trade back below the breakout level isn’t the most desirable outcome, as long as price can carve out a higher-low (an event which may take shape on the June trend-line) then cable remains constructive.

Giving trend and support the benefit of the doubt, risk is skewed towards seeing the top-side projected range-high broken versus trading below the one-week low threshold. An additional factor which is supportive for GBPUSD to sustain a bid is the fact retail traders are currently holding a larger short position than long by a ratio of 1.32:1, which is considered a contrarian indication edging in favor of higher prices. For more on how to utilize sentiment, see our section on IG Client Sentiment.

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

GBPUSD: Daily

See the Webinar Calendar for a schedule of upcoming live events with DailyFX analysts.

—Written by Paul Robinson, Market Analyst

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

You can follow Paul on Twitter at @PaulRobinonFX.

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

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

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

To be added to Christopher’s e-mail distribution list, please fill out this form

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

To be added to Christopher’s e-mail distribution list, please fill out this form