Analys från DailyFX

GBP/USD Technical Analysis: Growth Higher, Inflation Lower

Published

8 år ago

2 februari, 2017

DailyFX

To receive James Stanley’s Analysis directly via email, please sign up here.

Talking Points:

GBP/USD Technical Strategy: Intermediate-term mixed; Near-term bullish.
Cable set a new 7-week high after yesterday’s FOMC statement; but this morning’s Super Thursday at the Bank of England brought price action down to support as the BoE moderated inflation forecasts.
If you’re looking for trading ideas, check out our Trading Guides. They’re free and updated for Q1, 2017. If you’re looking for ideas more short-term in nature, please check out our Speculative Sentiment Index Indicator (SSI).

In our last article, we looked at the budding up-trend in Cable as the pair had just run-up to fresh highs after the U.K Supreme Court ruling regarding Brexit. As more certainty has been transmitted around Brexit discussions over the past few weeks, price action in GBP has firmed to propel GBP/USD up to fresh seven-week highs; leading into this morning’s Super Thursday event out of the Bank of England.

At the last Super Thursday in November, the BoE adjusted inflation forecasts higher in response to the ‘sharp repricing’ in the value of the British Pound from the Brexit referendum, and then ensuing campaign of dovish policy from the Bank of England. And while Cable started the month of October with a dearth of demand, seeing a ‘flash crash’ in the early portion of the month as there were simply no buyers in the market; November started off on a far different note as bullish price action developed in response to the BoE’s shift on inflation expectations. This kept Sterling strong throughout the month of November, as the currency was one of the few from around-the-world that was actually stronger than the U.S. Dollar throughout the month.

This morning’s Super Thursday was quite a bit different than the last. At this morning’s meeting, the Bank of England ratcheted growth expectations quite a bit higher, bumping their expectation for GDP growth this year higher by 42% (from previously expecting GDP growth of 1.4% up to 2%). But at the same time, the BoE moderated inflation forecasts lower – taking their expectation for 2017 inflation down to 2.7% from 2.8%, with 2018 unchanged at 2.6%.

The net result of these moves around expectations was Sterling weakness, as the more moderate inflation expectations could make the prospect of a potential rate hike later in the year less-likely. But of particular note is how aggressively the growth forecast for 2017 was upgraded; and this could be part of the reason that support developed in GBP/USD on the heels of this morning’s news.

On the chart below, we’re looking at the hourly setup in GBP/USD with emphasis on the bullish price action over the past three weeks. The Fibonacci retracement that’s applied on the chart can be found by connecting the high from September 22nd down to the low of January 16th; and notice that current price action is trying to dig-out support around the 50% retracement of this move. Just below this zone of support is another interesting zone around the 38.2% retracement of the same move, showing at 1.2418. This level had provided two rather rigid bounces, and had previously set resistance just after Theresa May’s Brexit speech. This can be a novel area to investigate for stop placement on bullish, top-side approaches.

Chart prepared by James Stanley

— Written by James Stanley, Analyst for DailyFX.com

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Contact and follow James on Twitter: @JStanleyFX

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

Confidence is essential to successful trading, see this new guide – ’Building Confidence in Trading’.

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