Analys från DailyFX
Price & Time: Big Moment For Kiwi
Talking Points
- NZD/USD tests internal trendline
- EUR/USD fails at 50-day moving average
- SP 500 rebounds off key Gann level
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Foreign Exchange Price Time at a Glance:
Price Time Analysis: EUR/USD
ChartPrepared by Kristian Kerr
- EUR/USD failed earlier this week near the 50-day moving average in the 1.1100 area
- Our near-term trend bias is higher in the exchange rate while above 1.0920
- A daily close above 1.1100 is needed to re-instill upside mometum into the euro
- A very minor turn window is seen tomorrow
- A close back below1.0920 would turn us negative again on EUR/USD
EUR/USD Strategy: Square.
Price Time Analysis: SP 500
ChartPrepared by Kristian Kerr
- SP 500 found support earlier this week at the 2nd square root relationship of the year’s low near 2065
- Our near-term trend bias is positive while above this level
- Immediate resistance is seen around 2108 ahead of the all-time high
- A minor turn window is eyed here
- A daily close below 2065 would turn us negative on the index
SP 500 Strategy: Like buying on weakness against 2065.
Focus Chart of the Day: NZD/USD
NZD/USD has turned down again on further reports of lower Chinese demand for milk powder. The failure Wednesday to close above last week’s high around .6700 keeps the Kiwi in a negative position and vulnerable to a downside resumption. The trendline connecting the April/June highs near .6615 is now an important near-term downside pivot with a daily close below this level needed to confirm such a shift lower. The extreme negative sentiment recently recorded on the Daily Sentiment Index (DSI) suggests a more material upside correction should eventually play out in NZD/USD, but perhaps the exchange rate first needs to re-test the recent lows or even visit the 61.8% retracement of the 2009-2011 advance near .6400? A successful hold of .6615 followed by a move through .6700 would signal a more material correction is already starting to unfold.
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— Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
This publication attempts to further explore the concept that mass movements of human psychology, as represented by the financial markets, are subject to the mathematical laws of nature and through the use of various geometric, arithmetic, statistical and cyclical techniques a better understanding of markets and their corresponding movements can be achieved.
To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter @KKerrFX
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.
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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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