Analys från DailyFX

GBP/USD Technical Analysis: Bullish Despite USD’s 13-Year Highs

Published

9 år ago

21 november, 2016

DailyFX

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Talking Points:

GBP/USD Technical Strategy: Near-term bullish prospects, higher-low showing at prior resistance.
Cable has bounced off of higher-low support, and is currently finding short-term resistance at a key Fibonacci level.
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In our last article, we looked at the recent ramp-higher in GBP/USD with the question of whether we had established the new higher-low. And while that higher-low ended up digging a bit deeper on the chart, eventually finding support at the 1.2328 zone of prior resistance, the open of this week’s trading has seen another strong Sterling-move as the pair is running-higher.

While a potential trend-change might not be all that exciting given the current global landscape where trends are changing all over the place, the context with which this has been happening should be noteworthy: The U.S. Dollar is in the midst of fresh 13-year highs, and this is showing against most major currencies such as the Yen, Euro, Aussie, etc. But one currency that isn’t playing along is the British Pound, as the GBP/USD is merely working in a series of ‘higher-lows.’

The logic behind ‘why’ this is happening makes sense: After the ‘sharp repricing’ in the value of the British Pound around the Brexit referendum, inflationary pressure would likely begin to build, starting with imported products. And as inflation moves higher, this could force the Bank of England’s hand away from deeper interest rate cuts and even more loose monetary policy; which could drive the value of GBP-higher (removal of rate-cut bets functions similarly to increasing rate hike bets – stronger moves in the currency). The big question was when that inflation might begin to show, and how aggressively, and at that last BoE meeting we saw the bank begin to acknowledge this fact.

So, while the headlines around Brexit may still be threatening and uncertain, price action in GBP/USD has begun to move in a bullish manner after that most recent BoE meeting, forming a series of higher-highs and higher-lows. Price action appears to be working fairly cleanly with a Fibonacci retracement that can be found by taking the high on September 22 to the ‘flash crash’ low. The 61.8% retracement of this move has helped to set intermediate-term resistance at 1.2656, and the 50% retracement of this same move is showing short-term resistance at 1.2513.

With prices finding near-term resistance at this 1.2513 level, which is also near the 1.2500-psychological level, traders will likely want to wait for a stronger advance to push prices higher, at which point this current level of resistance could be near-term 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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