Analys från DailyFX
Price & Time: Top in Gold Next Week?
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:
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/JPY has moved steadily higher since finding support at the 5th square root progression of the June low in the .9430 area
- Strength over the 100.20 area has shifted our near-term trend bias to higher
- However, the 78.6% retracement of the May-June decline at 101.60 needs to be overcome soon to signal that a more important move higher is indeed underway in the rate
- Near-term cycles are muddled with a minor turn window seen early next week
- The 1×2 Gann angle line from the 3Q12 low at 99.05 remains key support and only weakness below this level would undermine the immediate positive tone and turn us negative
Strategy: Like the long side on a clear break of 101.60.
AUD/USD:
Charts Created using Marketscope – Prepared by Kristian Kerr
- AUD/USD has tested the 1×2 Gann angle line of the year-to-date closing high (now at .9235) several times over the past few days
- While over .9040 our near-term trend bias will remain higher in the Aussie
- However, a close over .9235 is needed soon to signal that a more important move higher is developing
- Very short-term cycle studies suggest today is a minor turn window
- The .9170 level is immediate support, but only aggressive weakness below .9040 would turn us negative on the Aussie
Strategy: Like holding long positions while over .9040 and may look to add if we see a close over .9235.
USD/CHF:
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/CHF remains in a weak position since failing last week at the 2×1 Gann angle line of the year-to-date high near .9750
- While below .9540 our near-term trend bias will remain negative in the rate
- The 5th square root progression of the year’s high near .9340 remains a key downside pivot with weakness below needed to prompt a more material decline
- Monday and Thursday look to be minor turn windows
- A close over .9540 is needed to turn the technical outlook more positive
Strategy: Only reduced short positions favored while under .9540, but like adding on a move through .9340.
Focus Chart of the Day: GOLD
Monday and Tuesday of next week is a medium-term cycle turn window in Gold. Given the persistence of the trend over the past three weeks with the approach of key resistance in the form of the 50% retracement of the 2008-2011 advance (polarity) and the 4th square root progression of the year-to-date low between 1301 and 1316 – a top of some form developing is the favored scenario. A failure around this resistance zone and follow on weakness below 1270 will confirm that a high is in place, but under 1248 is really required to signal the onset of a more important decline in the metal. Strength in XAU/USD beyond 1316 after Tuesday would invalidate the cycle turn window and shift our focus higher.
— Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
Looking for a way to pinpoint sentiment extremes in 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
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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