Analys från DailyFX

NZDUSD – Options Implied Volatility Elevated Ahead of RBNZ

Published

7 år ago

9 augusti, 2017

DailyFX

What’s inside:

One-day implied volatility rises to over 14% ahead of RBNZ this evening
Price levels and projected range low/high levels which are in alignment
Knee-jerk reaction may be faded, downside may be curtailed with recent slide into consideration

Looking for a longer-term view on NZDUSD? Check out our Q3 Forecast.

In the following table, we listed levels of implied volatility (IV) for major USD-pairs looking out over the next one-day and one-week time-frames. Using levels of IV we calculated the projected range-low high prices from the current spot price within one-standard deviation for specified periods. (Theoretically speaking, there is a 68% probability that price will remain within the lower and upper-bounds.)

NZDUSD one-day implied volatility rises to over 14% ahead of today’s RBNZ, levels to consider…

This evening at 21:00 GMT the RBNZ will release its decision on interest rates and policy statement, followed by a press conference with central bank’s governor Wheeler to begin at 22:00. The central bank is expected to stand pat at 1.75%, so no surprise is likely to stem from their decision not to make a move on rates. Where volatility is likely to spawn from is the policy statement and press conference. One-day implied volatility is currently at 14.25%, which is elevated but nothing extreme. At that level, a one-standard deviation range from spot price can be derived with a low at 7268 and high at 7378. The one-week projected range is between 7218 and 7428.

Since topping last month at 7558, kiwi has been aggressively declining, perhaps in anticipation of the RBNZ having a more cautious tone. With that in mind, we could already see a dovish stance priced in and further downside risk curtailed. The one-standard deviation low arrives at 7268, which is near a key reversal day low back on 7/18. This could be a spot on an initial knee-jerk reaction lower we see buyers step in.

Moving in line with the trend, a pop higher from the support zone NZDUSD is currently trading around (~7320/45) may lend to a bounce for sellers to step in. The one-day projected high (1 StDev) arrives at 7378, which is in approximate alignment with the recently broken channel line off the May low.

In either event, barring an unforeseen move in rates (unlikely) or strong language one way or the other, a move in either direction may fade. Given the 200+ pip drop off the highs into today’s meeting lends to the notion of having most of today’s event may be priced in and that a drop into lower levels could result in a short-term wash-out.

Keep in mind: The fact the announcement comes at the close of New York trading (roll-over) and the press conference in the very early hours of Asia trading means liquidity will be low and exaggerated moves can occur.

For other currency volatility-related articles please visit the Binaries page.

NZDUSD: Daily

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—Written by Paul Robinson, Market Analyst

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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