Analys från DailyFX
Price & Time: Mixed Picture For USD Heading Into the Bernanke Testimony
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 failed last week just below the 78.6% retracement of the May to June decline in the 101.55 area
- Subsequent weakness from there has shifted the near-term trend bias to lower in the exchange rate
- The 1×2 Gann angle line from the September 2012 low in the 98.85 area is key support and a close under this level is required to usher in a period of more sustained weakness
- Near-term cycle studies are a bit muddled here, but Thursday and Tuesday look like potential minor turn windows
- The 100.20 level is resistance and only traction above there undermines the immediate negative technical structure and turns us positive on the rate
Strategy: Like small short positions while below 100.20, but wary of a broader USD trend resumption commencing over the next few days.
USD/CHF:
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/CHF failed last week at the 2×1 Gann angle line of the year-to-date high in the .9750 area
- The aggressive weakness that has followed has shifted our near-term trend bias to lower
- A convergence of the 5th square root progression of the year-to-date high and the 2×1 Gann angle line of the 2012 high in the .9335 area is key support and must be breached if latest decline is to be taken mnore seriously
- Near-term cycle studies suggest Wednesday is minor turn window
- The .9540 area is key resistance and traction above is required to turn us positive on USD/CHF
Strategy: Only reduced short positions favored under .9540 as several cyclical techniques suggest the broader USD uptrend may attempt to reassert over the next couple of days.
USD/CAD:
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/CAD falied last week just under the 6th square root progression of the May low in the 1.0610 area
- The steady decline from this resistance has turned the near-term trend bias lower in Funds
- The 3rd square root progression of the May low at 1.0310 looks like a key downside pivot with weakness under this level needed to prompt a more serious decline
- Near-term cycle studies indicate Thursday and Tueday are possible minor turn windows in the rate
- Sustained strength back over 1.0440 is required to turn us positive on USD/CAD
Strategy: Short positions favored while under 1.0440.
Focus Chart of the Day: XAU/USD
The main currency pairs are giving off conflicting signals as to when the broader USD uptrend may try to resume. USD/Europe looks like it could try today while the commodity bloc and the yen seem to favor a few more days of USD weakness. One of these views is probably wrong. Inter-market cyclical analysis can often help clear up the picture during such muddled times, but not in this case as the next XAU/USD turn window is not really seen until early next week. The SP 500, on the other hand, looks like it could try to put in some sort of minor top today or tomorrow.
— Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
Looking for a way to pinpoint sentiment extremes in the Gold 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
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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
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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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