Analys från DailyFX
Price & Time: Cable Outlook Getting Less Murky
Talking Points
- EUR/USD nears important test
- NZD/USD falls to new multi-year low
- GBP/USD closing in on key support zone
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Foreign Exchange Price Time at a Glance:
Price Time Analysis: EUR/USD
ChartPrepared by Kristian Kerr
- EUR/USD filled the weekend gap down yesterday before turning lower again
- Our near-term trend bias is lower in the euro while below 1.1180
- Last week’s low near 1.0950 is a near-term pivot ahead of the critical June low at 1.0820
- A very minor turn window is eyed tomorrow
- A close back over 1.1180 would turn us positive on EUR/USD
EUR/USD Strategy: Like the short side while below 1.1180.
Price Time Analysis: NZD/USD
ChartPrepared by Kristian Kerr
- NZD/USD continued its decline on Tuesday to trade at its lowest level in almost 5-years
- Our near-term trend bias is lower in the kiwi while below .6800
- The 2010 low around .6560 in the next major downside attraction for the rate
- A turn window of some importance is eyed early next week
- A daily close back over .6800 would turn us positive again on NZD/USD
NZD/USD Strategy: Like the short side whie below .6800.
Focus Chart of the Day: GBP/USD
GBP/USD has come under modest but steady pressure since failing last month at the 50% retracement of the 2014 – 2015 decline just below 1.5900. It is still up in the air whether a more serious top is in place or not, but the steady erosion of Gann supports over the past few days is negative. The 200-day moving average and the 38% retracement of the April – June advance coincide around 1.5440-15 and this area looks to be the next important test for the exchange rate. Traction below exposes critical support at 1.5170 (June low), while a successful hold raises the possibility of another leg higher. The first part of next week looks quite important for the pound from a medium-term cyclical perspective.
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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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