Analys från DailyFX
NZDUSD Next Leg Lower Around the Corner?
- EURUSD and USDCHF LONG TERM momentum pattern implications
- USDJPY rebounds at year open
- NZDUSD next leg lower soon?
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Monthly
Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0
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-“IF EURUSD trades to a new low while staying below 1.2791 THEN a 5 wave decline from the May high is probably nearing completion. 1.2315/28 would be of interest for a low. IF EURUSD exceeds 1.2791 while staying above 1.2500, THEN expect resistance between 1.2865 and 1.30 and a move to new lows thereafter.” The former scenario is on track so look for a top.
-BIG picture, monthly RSI has broken out of a triangle pattern. Sometimes, a pattern breakout in momentum (or OBV) precedes the breakout in price. The development’s implications are obviously significant.
Weekly
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-“GBPUSD has retraced half of the rally from the 2013 low and then some. The top side of the line that extends off of the 2011 and 2013 highs is a level to keep in mind but the next major support level is the November low at 1.5853, followed by the June 2013 high and 61.8% retracement at 1.5720/50. 1.6150-1.6224 is resistance.”
-GBPUSD has followed through on the 10/15 reversal but strong resistance is seen from 1.6160 and 1.6250. The trend is down against 1.6524 and 1.5750 is the next possible support.
Weekly
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-“The combination of the .9400 figure and weekly RSI failing near 60 indicates a lot of overhead to punch through. Since the 2011 top, each RSI failure near 60 has led to a top or topping process (range for several weeks then a breakdown…that may be the case now).”
-AUDUSD broke down from a head and shoulders top on 9/9. The target was reached 4 days after the pattern completed. Weakness has extended below the line that extends off of the 2008 and 2014 lows, warning of something much more significant on the downside. .8500 is a possible bounce level.
Weekly
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-“Don’t forget about the line that extends off of the 1996 and 2007 highs. That line crosses through the 2008, 2011, and highs as well. In 2011 (record free float high), the rate surged through the line in late July before topping on August 1st. The rate reversed this week from pips below the record high and above the mentioned line.”
-“Above .8534 is needed in order to suggest that at least a minor low is in place. Look lower as long as price is below that level.” The pivot can be lowered to .8169. The February low is now resistance at .8050. The gap from Labor Day 2013 has held as support so far at .7720 but weakness below opens up the October 2009 high at .7634. Ultimately, weakness below .7370 would confirm a double top with an objective of .5898.
Weekly
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-“5 waves up from the 2011 low are counted which raises the risk of a sharp reversal lower from the trendline that extends off of the 2001 and 2007 highs. 106.80 and 105.40 are reaction levels (support).” USDJPY dropped into the December high (and 2014 year open) this week, which provided support. Given the significance of the level at the recent top, I’m inclined to look at the short side on strength.
Monthly
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-USDCAD traded to its best levels since July 2009 this week but finished in the middle of its range for the week. The close and weak momentum profile casts doubt regarding the validity of the breakout but continue to look higher as long as price is above 1.1080. The rate also encounters potential resistance near 1.1450 from the upward sloping line that connects the October and 2011 and March 2014 highs.
Monthly
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-USDCHF traded into the .9300-.9430 support zone this week, which may reset the market for another rally attempt. Remember, USDCHF broke above the trendline that extends off of the 2001 and 2010 highs. Like EURUSD, USDCHF monthly RSI broke from a potentially long term basing pattern. As long as .9300 holds, look higher.
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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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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- Brent steady at $65 ahead of OPEC+ and Iran outcomes
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