Analys från DailyFX
Price & Time: Price Action Confirms the Importance of 1.3220 in EUR/USD
EUR/USD closes week right on a critical level while USD/JPY threatens to break crucial resistance. AUD/USD finds support at a “secret” retracement.
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Foreign Exchange Price Time at a Glance:
Price Time Analysis: USD/JPY
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/JPY convincingly broke above resistance at 98.60 to trade to its highest level in a month on Monday
- While over 96.70 our near-term trend bias will remain higher in the exchange rate
- An important Gann convergence between 99.45 and 99.65 is a major upside pivot with traction above required to signal the resumption of the broader uptrend
- A medium-term cycle turn window is seen around the middle of the week
- Intermediate support is seen around 97.50, but only weakness below 96.70 would turn the technical outlook negative
USD/JPY Strategy: Like the long side whilst over 96.70.
Price Time Analysis: AUD/USD
Charts Created using Marketscope – Prepared by Kristian Kerr
- AUD/USD rebounded last week off the 88.6% retracement of the August range in the .8890 area
- While over .8890 our near-term trend bias is higher in the Aussie
- Important Gann resistance is seen around .9040 with a close above now required to confirm the start of a more important upside move
- A minor turn window is seen around the middle of the week
- Weakness below .8890 will turn us negative on the exchange rate
AUD/USD Strategy: Like the long side against .8890.
Price Time Analysis: GOLD
Charts Created using Marketscope – Prepared by Kristian Kerr
- XAU/USD failed last week on a closing basis at the 7th square root progression of the year-to-date low near 1418
- While over the the 2nd square root progression of last month’s high in the 1355 area our near-term trend bias will reamain higher
- A close over 1418 now needed to signal a resumption of the uptrend
- A minor turn window is seen around the middle of the week
- A close under 1355 would turn the near-term outlook to negative in the metal
XAU/USD Strategy: Like the long side while above 1355.
Focus Chart of the Day: EUR/USD
We wrote about the importance of 1.3220 last week. It can be read here. Interestingly on Friday after a break of this level by almost 50 pips intraday the Euro came back to close the day, week and month right at 1.3220. After many years of observation we have found such “magnetic” behavior is not that uncommon around Gann levels of importance. Given Friday was also an important cycle turn window, the intraday reversal off 1.3170 back to 1.3220 is suggestive of a potential broader upside resumption in EUR/USD. Strength over 1.3315 would be further confirmation of this notion. Weakness, on the other hand, below 1.3170 would reinvigorate immediate downside possibilities.
— 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.
Looking for a way to pinpoint sentiment extremes in the Euro 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
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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