Analys från DailyFX
Price & Time: Right Shoulder in the Euro?
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 traded to its highest level in over 4 ½ years on Monday before finding resistance at and Andrew’s line related to the February and March lows
–Our bias is higher in the exchange rate, but traction over the 100% extension of the late April decline in the 102.65 area is needed to maintain the upward tack
-Near-term time cycles suggest scope for a minor high today or at the end of the week
-The 1×4 Gann angle line from the February low in the 101.15 area is immediate support
-However, only weakness below the 50% retracement of the May advance at 99.60 turns us negative on the rate
Strategy: Over 99.60 we continue to like holding long positions.
AUD/USD:
Charts Created using Marketscope – Prepared by Kristian Kerr
–AUD/USD has come under further pressure pressure over the past few days and touched its lowest level since June on Tuesday
-Our bias is still lower with focus on the important 38% retracement of the 2010 to 2011 advance in the .9920 area
-This level could act as a strong support and a close below there is needed to expose .9870 and below
-Near-term focused time cycle analysis suggests the latter part of the week is a minor turn window
-The 6th square root progression of the year-to-date high in the .9990 area is now resistance and only strength back through this level turns us positive on the Aussie
Strategy: Like holding reduced short postions whilst below .9990.
Gold:
Charts Created using Marketscope – Prepared by Kristian Kerr
–XAU/USD failed last week at the 4th square root progression of the year-to-date low in the 1470 area
–Our bias remains to the downside in the metal with the 1397 convergence of the 1×2 Gann line and 2nd square root progression of the year-to-date low seen as the next key pivot area
-Short-term focused time cycles indicate a turn could be seen in the metal around the middle of the week
-The 50% retracement of the May decline near 1453 is immediate resistance
-However, only a close over 1470 would undermine the negative technical structure
Strategy: Short positions favored in Gold whilst below 1470.
Focus Chart of the Day: EUR/USD
Since late January we have written about the importance of the late April/early May timeframe for the Euro as a confluence of Gann, Fibonacci and Pi related cyclical techniques suggested an important turn in the market would be seen during this time. With the window now past us and the exchange rate having made 3 clear highs during this period a high of some significance looks to be in place in EUR/USD. If our view is correct then the Euro should remain generally weak in the weeks/months ahead. A potential head shoulders topping pattern extending back to September of last year seems to further support this view. The 1.3240 area now looks like critical resistance. Any unforeseen aggressive strength over this level would be very positive for the exchange rate and likely setup an aggressive move higher as major time resistance is offset.
— Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
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To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter @KKerrFX
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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
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You can follow Paul on Twitter at@PaulRobinonFX.
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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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