Analys från DailyFX
Improve Timing in Japanese Yen Trades with US Treasury Bond Levels
Like last week, plans call for selling a USDJPY rally. A move into 100.17/26 would be most welcome. Why? 100.17 is the post FOMC minutes close (hourly) and a significant volume level. 100.26 is the 61.8% of the decline from 101.53. Watch the rate along with the 30 year US bond to improve entry.
USDJPY
Hourly
Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0
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FOREXAnalysis: In last evening’s Daily Technicals, I focused on the near term triangle that was forming in the USDJPY. The triangle pattern failed as the USDJPY has exceeded 99.62. The rise is best classified as a 3 wave advance (triangle wave b). Just like last week, the implications are to look for an early week top. An rally into 100.17/26 would be most welcome. Why? 100.17 is the post FOMC minutes close (hourly) and a significant volume level. 100.26 is the 61.8% of the decline from 101.53. Watch the rate along with the 30 year US bond (see below chart) to improve entry. Strong support is seen at the 61.8% retracement / trendline / large volume NFP hourly close of 133 6/32. It’s critical to be alert to pattern and market levels in the bond market in the current market environment. In fact, pattern and a support in the bond level helped us anticipate Wednesday’s reaction.
FOREX Trading Strategy: Looking to short USDJPY above 100.
30 Yr U.S. Treasury Bond Contact (September)
Hourly
Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0
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GBPJPY
4Hour
Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0
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FOREXAnalysis: We may get the opportunity to play a breakdown in the GBPJPY soon. Price has broken a series of trendlines in the last 2 months (see next chart…trendline extends off of the November and February lows and November and April lows). Once broken, the November-February trendline served as resistance in June and earlier this month. The November-April trendline has served as resistance for the last 2 days.
A head and shoulders top break failed in mid-June but price may be forming another head and shoulders top right now. In fact, the potential pattern is downward sloping and therefore especially bearish if confirmed. The target from this shorter term pattern would be 144.53 (break below 148.77 is needed). If confirmed, measured objectives from the larger pattern are 141.10 and 139.40. These levels are in line with the April and February lows.
FOREX Trading Strategy: Looking for an early week high (timing is going to be with USDJPY).
GBPJPY
Daily
Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0
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Daily
Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0
Interested in automated trading with Mirror Trader?
FOREXAnalysis: Commodity Analysis: Gold’s rally consists of 2 equal legs (almost exactly). This relationship is typical of corrective movements. Just as important, the level is also defined by the 6/20 close. Volume that day was the 4th highest of the year, behind only 4/12, 4/15-4/16. The current area is also defined by Elliott channel resistance. In other words, there is a lot to push through here. Between here and 1340 is ‘no man’s land’. A push above 1340 would warrant a closer look, possibly offering a chance to buy dips. Several patterns were discussed at the beginning of Friday’s DailyFX Plus webinar. The bigger picture was covered last week.
FOREX Trading Strategy: Flat
Gold
Daily
Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0
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AUDUSD
Daily
Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0
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FOREXAnalysis: Diabolical AUDUSD trading resumes, which in itself may indicate that a low is nearby. Momentum has waned significantly with the last several closing lows generating RSIs above 30. The NZDUSD has failed to confirm the AUDUSD low as well (although that could change). Specific levels to watch for a low are the trendline confluence next week and 161.8% extension of the early June decline at .8911.
FOREX Trading Strategy: Was stopped out of longs Friday. Once again on the look for a ‘tradeable’ low.
— Written by Jamie Saettele, CMT, Senior Technical Strategist for DailyFX.com
To contact Jamie e-mail jsaettele@dailyfx.com. Follow him on Twitter @JamieSaettele
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Jamie is the author of Sentiment in the Forex Market.
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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