Analys från DailyFX

GBP/USD Technical Analysis: Range Break into a Bull Flag

Published

8 år ago

4 maj, 2017

DailyFX

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Talking Points:

GBP/USD Technical Strategy: Intermediate-term bullish, near-term congested.
Cable posed a top-side breakout of the prior range, but bulls were tempered shy of the vaulted 1.3000-figure.
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In our last article, we looked at the range that had developed in GBP/USD after the aggressive top-side breakout, triggered by PM Theresa May’s surprise announcement of early general elections. And this driver is key – as this happened just two days after the first round of French elections. After market open following the first round of French elections, the risk trade saw a significant shot-higher. Meanwhile, GBP/USD meandered between 1.2500 and 1.2593 but saw no major moves until Theresa May’s surprise announcement the following day.

But after that announcement, price action climbed by almost 400 pips as the six-month prior range yielded to surging prices. As we had written at the time, at least a portion of that move was likely driven by short-cover as bears got squeezed with prices running continuously-higher. That range-bound formation held for a little over a week until bulls were finally able to re-take control; but that bullish move was moderated well-ahead of the vaulted psychological level at 1.3000. Since then, a bearish channel has developed, giving us a bull flag formation, as shown below.

Chart prepared by James Stanley

Given the pair’s inability to set a high above 1.3000 and also given the near-term lower-lows that have begun to show-up with that bull flag formation, and bulls will likely want some additional confirmation before looking to add exposure. This can be done in two ways: by either a) waiting for a longer-term support level to show-up at which point buyer support could open the door to top-side entries with controlled risk. Or by b) letting price action break-above the ‘lower-high’ that substantiates the resistance trend-line of the bull flag, at which point that price could be re-assigned as ‘higher-low’ support with targets set towards 1.3000. We discussed the second methodology earlier in the week in the article entitled, How to Use Price Action to Trade New Trends.

For those looking to trade for trend-continuation on a longer-term basis, the zone between 1.2750-1.2775 is an ideal area to watch for support to show. This is the approximate area of where resistance was during the six months of range-bound price action before the Theresa May-inspired breakout. Should buyer support show-up in this area, the setup could allow for concentrated risk with bullish continuation strategies.

Chart prepared by James Stanley

— Written by James Stanley, Strategist for DailyFX.com

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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

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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

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