Analys från DailyFX
Price & Time: Key Time Period Here for AUD/USD
Talking Points
- USD/JPY setting for an important move
- NZD/USD entering into important cycle turn window
- Watching the weekly in AUD/USD
Unfamiliar with Gann Square Root Relationships? Learn more about them here.
Foreign Exchange Price Time at a Glance:
Price Time Analysis: USD/JPY
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/JPY remains in consolidation mode below the 2nd square root relationship of the year’s low at 102.75
- Our near-term trend bias is higher in the exchange rate while above 101.35
- A daily close over 102.75 is needed to set off a more important advance
- A minor cycle turn window is seen early next week
- A daily close below 101.35 will turn us negative on USD/JPY
USD/JPY Strategy: Square in this range. Break of 102.75 or 101.35 will force us in.
Price Time Analysis: NZD/USD
Charts Created using Marketscope – Prepared by Kristian Kerr
- NZD/USD probed above the 4th square root relationship of the year’s low at .8405 today to trade at its highest level since mid-January
- Our near-term trend bias is positive on the Bird while above .8360
- The year’s high and the 78.6% retracement of the Oct/Feb decline between .8430/40 is important resistance
- An important cycle turn window is seen over the next few days
- A daily close under .8360 will turn us negative on the Kiwi
NZD/USD Strategy: Like the long side while over .8360, but positions should be reduced into this turn window. Will look to cover and go short on a move through .8360.
Focus Chart of the Day: AUD/USD
Two key “Pi cycle” relationships related to the 2011 high and 2001 low in AUD/USD converged this week. We have purposely neglected to mention them until now because we are unsure what they mean for the exchange rate and were hoping to get more clarity by observing the daily price action. It still remains unclear. We do suspect that following such a clear convergence of major cyclical relationships that this time period will ultimately prove to be a very important inflection point for the Aussie. However, we now have to defer to the weekly charts for directional clarity. This week’s low of .8900 and last week’s high of .9080 are key pivots. A clear break of this week’s low will confirm that an important top is in place and set the stage for a resumption of the broader decline. Conversely, a move back through .9080 would confirm that a low of importance has been recorded in AUD/USD. A Pi cycle relationship related to the 2011 high in NZD/USD hits early next week. Perhaps the Aussie is waiting for its Antipodean cousin to show the way?
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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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