Analys från DailyFX

Japanese Yen Technical Analysis: Is the Rally Getting Overextended?

Published

7 år ago

11 augusti, 2017

DailyFX

Talking Points

The Japanese Yen has the US Dollar on the ropes
Its clear short-term downtrend is only the acceleration of a broader weak tone
The New Zealand Dollar is also struggling harder against the Japanese currency

See how the trading community feels about the Japanese Yen’s chances at the DailyFX Sentiment Page.

It will probably come as no surprise to you to learn that the Japanese Yen is putting in a pretty strong performance right now, especially against the US Dollar.

USD/JPY is right in the middle of a solid downtrend channel on its daily chart. This channel began at the most significant recent peak, July 10’s 114.00 or so (instructively that was some way lower than the previous notable top, made on May 11).

More worryingly for any remaining bulls, at the time of writing (02:00 GMT Friday) the Dollar seems to be failing at its next significant support level. It broke below June 14’s closing low of 109.33 a day ago and now only June 14’s intraday nadir of 108.75 remains of a cluster of props around that area. Should that give way – as looks very likely – then only a modest clutch of support at mid April’s lows of 108.44 stands between the pair and a retest of the long climb up from last November’s 103 levels.

One crumb of comfort for those still long, and it’s only a crumb, is that USD/JPY is starting to look a little oversold. Its Relative Strength Index is at 32. That’s only a whisker above the 30 point which is generally thought to mean objective overselling. However, we should not kid ourselves that the pair is in anything other than a broad downtrend which, if it is to be checked, is going to need more resolve than the bulls have so far shown.

This week has been a poor one for those long of the New Zealand Dollar. There’s a solid fundamental basis for this as at least two of its home central bank officials have actively tried to talk it down. That being so it should not be surprising that the technical picture has darkened a little and indeed it has. NZD/JPY had been in a gradual downtrend since it hit July’s 27’s peak of 83.87. The downtrend has picked up in the past five sessions with that downtrend line now much further away from the spot price.

Now support from June starting in the mid 78s is in view. NZD/JPY’s RSI is at this point more obviously in oversold territory than USD/JPY’s, standing at 22. That might make the Kiwi more prone to a bullish rethink than its US cousin but, all the same, significant near-term support around current levels is hard to spot.

One clear caveat to all this Yen bullishness must come not from the world of technical analysis but from the fundamental side. The investment world is clearly in a rather risk-averse mood and, given the heated rhetoric passing between the United States and North Korea this week, that’s fair enough.

However, risk appetite can change on a dime – and the Yen is perhaps the pre-eminent risk averse currency play. That’s something to bear in mind, surely, as you scan the upbeat charts.

— Written by David Cottle, DailyFX Research

Contact and follow David on Twitter: @DavidCottleFX

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

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

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

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