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Price & Time: Kiwi Finally Corrects

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Talking Points

  • USD/JPY stalls at key resistance zone
  • Cable still struggling for direction
  • NZD/USD testing important trendline

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Foreign Exchange Price Time at a Glance:

Price Time Analysis: USD/JPY

Price amp; Time: Kiwi Finally Corrects

ChartPrepared by Kristian Kerr

  • USD/JPYstalled near the mid-June highs earlier this week
  • Our near-term trend bias is higher in the exchange rate while above 1.2300
  • A daily close above the 78.6% retracement of the June – July decline at 124.70 is needed to re-instill upside momentum into the rate
  • A minor turn window is seen early next week
  • A close under 122.00 would turn us negative on USD/JPY

USD/JPY Strategy: Like the long side while over 122.00

Price Time Analysis: GBP/USD

Price amp; Time: Kiwi Finally Corrects

ChartPrepared by Kristian Kerr

  • GBP/USD continues to consolidate below the 61.8% retracement of the June – July decline at 1.5700
  • Our near-term trend bias is lower in cable while below 1.5700
  • A move back under 1.5525 is needed to re-instill downside momentum into the exchange rate
  • A very minor turn window is eyed today
  • A daily close above 1.5700 would turn us positive on the pound

GBP/USD Strategy: Like the short side while below 1.5700

Focus Chart of the Day: NZD/USD

Price amp; Time: Kiwi Finally Corrects

We wrote last week about the extreme negative sentiment picture developing in NZD/USD and the propensity for such conditions to lead to some fairly sharp counter-trend moves. Almost on cue after touching the 5% bulls level on the DSI the kiwi began to rally at the start of the week (helped by comments from the NZ Prime Minister – a former FX trader). Last night’s decision to “only” cut the key rate by 25 basis points (some were looking for 50bps) and a less dovish than expected accompanying statement has forced a further scramble for a wrongly positioned market. The key level to watch over the next few sessions looks to be the trendline connecting the May/June highs around .6700. A daily close or two above .6700 would warn that a deeper retracement is at hand while a clear failure here at resistance would open the way for a move to test long-term Fibonacci attraction around .6400.

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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

Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

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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

EURUSD Weekly Technical Analysis: New Month, More Weakness

—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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Analys från DailyFX

Euro Bias Mixed Heading into October, Q4’17

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Euro Bias Mixed Heading into October, Q4'17

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

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British Pound Reversal Potential Persists Heading into New Quarter

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British Pound Reversal Potential Persists Heading into New Quarter

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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