Analys från DailyFX
Price & Time: Important Couple of Days Coming Up for AUD/USD
Talking Points
- USD/JPY rebounds from key short-term Fibonacci level
- GBP/USD recovers from Gann support at 1.6345 again
- AUD/USD enters into medium cycle turn window
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Foreign Exchange Price Time at a Glance:
Price Time Analysis: USD/JPY
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/JPY came under heavy downside pressure on Tuesday and close below the 2nd square root relationship of the year-to-date high at 103.35
- Our near-term trend bias is now lower in USD/JPY and will remain so while below 104.80
- The 161.8% projection of the early January decline at 102.85 acted as support on Monday and weakness below this level is now needed to confirm a resumption of the near-term decline
- A minor cycle turn window is seen around the latter part of the week
- Only a close over 104.85 would turn us positive on USD/JPY
USD/JPY Strategy: Sell into strength while below 103.80
Price Time Analysis: GBP/USD
Charts Created using Marketscope – Prepared by Kristian Kerr
- GBP/USD came under aggressive downside pressure on Monday before finding support again at the 2nd square root relationship of the year-to-date high at 1.6345
- Our near-term trend bias is lower in Cable while below 1.6570
- Support at 1.6345 is critical and needs to breached soon if further material weaknes is to be seen
- A minor cycle turn window is seen around the end of the week
- Only aggressive strength over 1.6570 on a daily close basis would turn us positive on the Pound
GBP/USD Strategy: Like the short side while under 1.6570.
Focus Chart of the Day: AUD/USD
We were planning on writing today about the medium-term cycle turn window in AUD/USD over the next couple of days, but the market seems to have beat us to the punch. The resistance area at .9040/60 where Aussie has seemingly failed is potentially important as it marks a convergence of several Gann levels. Just how important this turn proves to be will depend heavily on the follow through over the next few days. The 8th square root relationship of the 4th quarter high at .8960 is an important near-term pivot ahead of critical support at .8860. Traction below the latter would confirm a broader downside resumption. There is a chance that this latest decline is only a minor reprieve before heading higher again, but only a daily close over .9060 negates the negative cyclicality.
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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.
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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