Analys från DailyFX

GBP/USD Technical Analysis: Resisting at Financial Collapse Lows

Published

9 år ago

29 juni, 2016

DailyFX

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Talking Points:

GBP/USD Technical Strategy: Dramatic drop on heels of Brexit, but two-day recovery that’s seen ~375 pips come back.
GBP/USD is likely going to remain volatile in the near-term. Continue to tread with caution.
If you’re looking for trading ideas that aren’t GBP-related, check out our Trading Guides. And if you want something more short-term in nature, check out our SSI indicator. If you’re looking at opening a trading account, FXCM has a contest at the beginning of next month for certain account holders. Click here for full details.

In our last article, we looked at the increasing volatility being seen in the British Pound ahead of the Brexit referendum. And the volatility around the vote was fairly extreme: British voters bucked market expectations by electing to leave the European Union, and this created considerable chaos across global financial markets. Stocks sold off, bonds rallied and Gold prices went ballistic; and as many would’ve expected, the British Pound put in a notable move lower by dropping as much as -12.7% from the pre-referendum highs. This was a peak-to-trough move of 1,900 pips after a low was set on Monday of this week at 1.3118.

Since that low was set, we’ve seen over 375 pips come back into the Cable, and while this might sound like an enticing event in a ‘normal market,’ we’re still fairly far from that type of environment in GBP; this 375-pip ramp hasn’t even hit the 23.6% retracement of the ‘Brexit move.’

Current price action is catching resistance at a familiar level, as the 1.3500 level was the low set in the Great Financial Collapse while also being a ‘major’ psychological level. This could be very attractive for short-side trend resumption plays, but traders should take caution that this retracement may have more room to run before down-side continuation becomes attractive. A bit deeper on the chart in the zone from 1.3834-1.3843 we have two interesting levels, as 1.3834 was the ‘pre-Brexit swing-low’ in the Cable, while 1.3843 is the 38.2% retracement of the Brexit move. This could be an attractive level to look for resistance in the effort of implementing continuation strategies.

Also of interest, retail positioning has been narrowing a net long position since Monday of this week. Decreasing long exposure, moving into or towards negative territory has a tendency to highlight bullish price movements. I’ve added five previous instances on the chart below with accompanying price action indicated in blue boxes. To learn more about SSI, please click on this link to access a free guide walking you through the indicator.

Created with Marketscope/Trading Station II; 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

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