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Price & Time: The Next Few Days Look Important for the Euro

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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:

PT_next_few_days_imprtant_euro_body_Picture_4.png, Price amp; Time: The Next Few Days Look Important for the Euro

Charts Created using Marketscope – Prepared by Kristian Kerr

USD/JPY continues to move higher, but has stalled over the past couple of days near the 50% retracement of the 2007 to 2011 decline in the 99.80 area

Our bias remains higher in the pair with focus on 99.80 and the psychologically significant 100.00 level

-Traction above these levels needed to setup the next leg higher towards 100.65 and beyond

-Near-term focused time cycle analysis indicates a minor turn window is in effect on Friday

-A convergence of Gann levels in the 98.30 area is now immediate support and only weakness below this level shifts our focus lower

Strategy: We remain long half a unit from 94.15. Stop now just under 98.20.

AUD/USD:

PT_next_few_days_imprtant_euro_body_Picture_3.png, Price amp; Time: The Next Few Days Look Important for the Euro

Charts Created using Marketscope – Prepared by Kristian Kerr

AUD/USD broke convincingly above the 1.0495 78.6% retracement of the year-to-date range on Thursday

-Our bias remains higher in the Aussie with attention now on a convergence of the 161.8% extension of the early April decline and the 61.8% projection of the March advance in the 1.0590 to 1.0620 area

-Short-term time cycle analysis indicates a minor turn could be seen on Friday

-The 4th square root progression from the year-to-date low in the 1.0520 area is immediate support

-However, only weakness on a closing basis under the 1.0495 78.6% retracement of the year-to-date range would shift our bias to negative

Strategy: Got long on the break of 1.0505. Took profit on half this position at 1.0575 (2x our initial risk). Stop on remaining position is now at cost.

USD/CAD:

PT_next_few_days_imprtant_euro_body_Picture_2.png, Price amp; Time: The Next Few Days Look Important for the Euro

Charts Created using Marketscope – Prepared by Kristian Kerr

USD/CAD came under further pressure on Thursday and broke below a key Gann Fibonacci confluence in the 1.0120/40 area

Our bias is now lower in Funds with focus on the 61.8% retracement of the February advance and the 127% extension of the last week’s range in the 1.0070/85 area

-Traction below this area needed to confirm the integrity of the current decline and open the way for move towards 1.0030

-Short-term time cycle analysis indicates early next week is a minor turn window

-Immediate resistance seen at 1.0140, but only strength over the 1×1 Gann line from the year-to-date highat 1.0190 undermines the negative technical tone and turns us positive

Strategy: We were worried the C$ would try to play catch up with the rest of the commodity bloc. Long in Funds got stopped out at 1.0120. May look to get short around the middle of next week.

Focus Chart of the Day: EUR/USD

PT_next_few_days_imprtant_euro_body_Picture_1.png, Price amp; Time: The Next Few Days Look Important for the Euro

The next few days are a medium-term turn window in EUR/USD. During this time, the Euro will 8.6 months or one “pi cycle” from the 2012 low recorded in late July. Given the persistency of the move higher in the pair over the past week there is scope that a high of some sort will be recorded during this time. Some levels of focus for us are the 38% retracement of the 2012 range near 1.3150 and the 4th square root progression from last week’s low around 1.3200. A clear failure around these levels would be further evidence that a top is indeed materializing. We should not that this Pi cycle window looks potentially much more important for EUR/JPY (8.6 months from 2012 low, but cross has gone virtually straight up since then) and weakness in the cross could be the real driver. More details on EUR/JPY tomorrow.

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.

Need guidance managing risk on trades? Download the free Risk Management Indicator.

To receive other reports from this author via e-mail, sign up to Kristian’s e-mail distribution list via this link.

Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

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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

Confidence is essential to successful trading, see this new guide – ’Building Confidence in Trading’.

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

EURUSD Weekly Technical Analysis: New Month, More Weakness

—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.

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Euro Bias Mixed Heading into October, Q4’17

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Euro Bias Mixed Heading into October, Q4'17

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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British Pound Reversal Potential Persists Heading into New Quarter

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British Pound Reversal Potential Persists Heading into New Quarter

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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