Analys från DailyFX
Price & Time: Major Breakout in USD/CAD?
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:
USD/JPY:
Charts Created using Marketscope – Prepared by Kristian Kerr
–USD/JPY has moved steadily higher since finding support at the 93.85 88.6% retracement of the April to May advance during a cyclical turn window the week before last
–Our bias is higher in the exchange rate, but a confluence of Gann levels in the 98.75 area needs to be surpassed to maintain the immediate upside tack
-Near-term focused time cycle analysis suggests weakness could be seen over the next day or two
-The 3rd square root progression of the month-to-date low at 96.75 is immediate support
-However, only weakness below 95.80 turns us negative on the exchange rate
Strategy: Like holding long positions in USD/JPY while over 95.80
GBP/USD:
Charts Created using Marketscope – Prepared by Kristian Kerr
–GBP/USD has come under aggressive downside pressure since failing last week during a key cyclical turn window at the 1×1 Gann angle line of the year-to-date high in the 1.5750 area
-Our bias remains lower in Cable, but an analysis of the short-term cycles indicates that a minor low could be seen over the next day or so
-Support is seen at 1.5310/25 ahead of the key 61.8% retracement of the May to June advance near 1.5290
-A close below the latter is needed to set up further material weakness
-The 1×1 Gann angle line from the year-to-date low at 1.5585 is now key resistance and only strength above this level turns us positive on Cable
Strategy: Like short positions in Cable whilst below 1.5585.
XAU/USD:
Charts Created using Marketscope – Prepared by Kristian Kerr
–XAU/USD came under aggressive downside pressure last week and traded to its lowest levels since September of 2010
-Our trend bias is lower in the metal, but extreme caution is requred through Tuesday as a long-term cyclical convergence suggests the metal is prone to an important reversal during this time
-Further bolstering this potential is a confluence of long-term retracements including the 38% retracement of the 1999 to 2011 bull market advance and the 50% retracement of the 2008 to 2011 move higher in the 1280 to 1300 area
-Strength above 1301 on a closing basis is needed to signal the start of a reversal in trend
-Continued weakness beyond Tuesday undermines the potential for cycle low and sets up a further decline towards 1255 and below
Strategy: Like being flat here with the cycles at a major turning point. Back over 1301 will get us looking long.
Focus Chart of the Day: USD/CAD
USD/CAD seems to be near a critical price point as the 1.0540 area marks a convergence of the 88.6% retracement of the October 2011 to September 2012 decline and the 100% projection of January to March move higher as measured from the May low. A close above this resistance will further legitimize the current advance and further pave the way for a push to new multi-year highs above 1.0655. Failure to gain traction over 1.0540 over the next few days will likely usher in a period of sideways consolidation.
— Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
Looking for a way to pinpoint sentiment extremes in the CAD 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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