Analys från DailyFX
Price & Time: How Important is This Turn in the Australian Dollar?
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.
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Foreign Exchange Price Time at a Glance:
NZD/USD:
Charts Created using Marketscope – Prepared by Kristian Kerr
–NZD/USD traded down to the 10th square root progression of the year-to-date high near .7755 on Tuesday before reversing sharply
–The push through the 2nd square root progression of the Tuesday’s low suggests a stronger correction is underway and our bias is now positive
-A Gann related cyclical turn window here further bolsters this view
-The 9th square root progression of the year-to-date high at .7940 is immediate support
-However, only weakness under .7845 turns us negative again on the Kiwi
Strategy: This looks to be the turn we were looking for. Like holding long positions while the Bird is over .7845
Gold:
Charts Created using Marketscope – Prepared by Kristian Kerr
–XAU/USD has come under steady pressure following last week’s failure at the 1×2 Gann angle line of the year-to-date closing low
-While below 1432 our near-term bias is negative
-The 78.6% retracement of the April to May move higher at 1358 remains a key near-term pivot with weakness below needed to trigger a more important push lower
-Longer-term cycles suggest the latter half of the month will be significant for the metal – a low is favored
-A close over 1430 would alter the near-term negative technical picture and turn us positive on Gold
Strategy: Like getting long the metal around June 20th.
EUR/GBP:
Charts Created using Marketscope – Prepared by Kristian Kerr
–EUR/GBP failed the week before last at the 3×1 gann angle line of the year-to-date high and has since come under steady pressure
-While below this angle line now around .8555 our bias is lower in the cross
-A convergence of the 4th square root progression of the year-to-date high and the 38% retracement of the July to Feb advance at .8440/05 is a critical support with traction below this area needed to prompt a more important decline
-Near-term cycle studies favor weakness into next week
-A move over .8555 is needed to turn us positive on the cross
Strategy: Remains rangebound in the big picture. Is difficult to get excited about a meaningful directional move until this is resolved.
Focus Chart of the Day: AUD/USD
The 43 to 50 day “Gann Death cycle” is in effect over the next few days in AUD/USD and NZD/USD. As we have noted in recent Price Times this frequency often leads to corrections or full on changes in trend when the trend leading into them is especially pronounced. The almost 12% 43 day decline in the Australian dollar most certainly qualifies as pronounced. Tuesdays reversal from just above the 12th square root progression of the year-to-date high and move through resistance levels at .9495 suggests the start of a bottoming process. An Andrew’s line related to the May high has done a remarkable job of capping rally attempts over the past few weeks and this line currently at .9590 looks like a natural pivot. A close above will be further confirmation of a change in trend. Some backfilling before this occurs would not surprise.
— Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
Looking for a way to pinpoint sentiment extremes in the Australian dollar in real time? Try the Speculative Sentiment Index.
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.
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
To be added to Christopher’s e-mail distribution list, please fill out this form
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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