Analys från DailyFX
Gold Drops to 2-Month Support, SPX 500 Upside Momentum Falters
Talking Points:
- US Dollar Rebound Capped at Monthly Channel Top Resistance
- SP 500 Declines as Expected But Overall Uptrend Still Intact
- Crude Oil Stalls at Trend Line, Gold Drops to 2-Month Support
Can’t access the Dow Jones FXCM US Dollar Index? Try the USD basket on Mirror Trader. **
US DOLLAR TECHNICAL ANALYSIS – Prices advanced as expected after prices put in a bullish Morning Star candlestick pattern. Near-term resistance is at 11888, the 38.2% Fibonacci expansion, with a break above that on a daily closing basis exposing the 50% level at 11937. Alternatively, a move below the 23.6% Fib at 11829 opens the door for a challenge of the 14.6% level at 11792.
** The Dow Jones FXCM US Dollar Index and the Mirror Trader USD basket are not the same product.
SP 500 TECHNICAL ANALYSIS – Prices declined as expected after negative RSI divergence argued for ebbing upside momentum. From here, a break below trend line resistance-turned-support at 2097.60exposes the channel floor at 2086.20. Alternatively, a push above the 2127.60-37.10 area (May 19, June 18 highs) targets channel top resistance at 2155.70.
GOLD TECHNICAL ANALYSIS – Prices have slumped back to two-month support after failing to hold up above the $1200/oz figure. A break below the 1170.30-86 area (May 1 low, 50% Fibonacci expansion) exposes the 61.8% level at 1162.64. Alternatively, a move above the 38.2% Fib at 1179.07 targets the 23.6% expansion at 1189.24.
CRUDE OIL TECHNICAL ANALYSIS – Prices continue to stall at trend line support guiding the recovery from mid-January. A break below this barrier – now at 63.09 – exposes the 38.2% Fibonacci retracement at 60.27. Alternatively, a move above the 23.6% Fib expansion at 66.69 targets the 38.2% threshold at 70.25.
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
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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.
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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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
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