Analys från DailyFX
Price & Time: Moment of Truth For the Markets
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.
Foreign Exchange Price Time at a Glance:
USD/JPY:
Charts Created using Marketscope – Prepared by Kristian Kerr
–USD/JPY has rebounded over the past few sessions after finding support at an Andrew’s line connecting the February and April lows in the 97.10 area
–While below a convergence of various Gann levels related to the year-to-date high and the February low in the 98.50 area our bias remain lower
-Under 97.10 now needed to signal a downside resumption towards 96.40 and below
-Time cycle analysis suggests the exchange rate is in a turn window over the next few days
-Traction over 98.50 will turn us positive on USD/JPY
Strategy: Lack of downside following the cyclical peaks warns that the rate is just in a consolidation. Over 98.50 will get us long.
GB/USD:
Charts Created using Marketscope – Prepared by Kristian Kerr
–GBP/USD traded to it highest levels since mid-February on Wednesday before finding resistance near the 50% retracement of the year-to-date range in the 1.5585 area
-Our bias remains higher in Cable, but a clear move over 1.5585 is requred to setup a more important push higher
-Short-term time cycles are a bit muddled, but scope for at least a minor turn seen around the first half of next weel
-The 3×1 Gann angle line from the year-to-date high in the 1.5475 area is immeidate support
-However, only weakness under the 50% retracement of the late April advance in the 1.5405 area would turn us negative
Strategy: Consolidation under 1.5585 is healthy. A close over this level would be bullish.
USD/CHF:
Charts Created using Marketscope – Prepared by Kristian Kerr
–USD/CHF has rebounded over the past couple of days from 3rd square root progression of the year-to-date high in the .9275 area
–While over the 2nd square root progression of the year-to-date low in the .9200 area our bias is higher in the rate
-The 2nd square root progression from the year-to-date high near .9370 is immediate resistance and strength above is required to signal that a more important move higher is underway
-Near-term time cycles favor a turn of some sort around the start of the week
-A close under .9200 will shift our bias to negative in the pair
Strategy: Like being long while the rate is over .9200
Focus Chart of the Day: Dow 30
Our cycle analysis suggests that this is an important week from a timing perspective. The action so far in the markets has been mixed with some instruments showing strong signs of reversing while others have plodded along with their maniacal trends. Students of Gann know that much attention is placed on the weekly chart and we may not know this importance (if any) of this week for another few more weeks to come. Lower lows on the weekly bars in the weeks ahead in stocks, the euro, etc. would confirm the significance of this week. However, until we get any such price action we see little reason to be positioned aggressively counter trend.
— Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter @KKerrFX
Are you looking for other ways to pinpoint support and resistance levels? Take our free tutorial on using Fibonacci retracements.
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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
—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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