Analys från DailyFX
Price & Time: USDOLLAR Stalls At Familiar Hurdle
Talking Points
- USD/JPY inching towards key pivot
- SP 500 meandering around 50-day MA
- USDOLLAR testing key retracement again
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Foreign Exchange Price Time at a Glance:
Price Time Analysis: USD/JPY
ChartPrepared by Kristian Kerr
- USD/JPYcontinues to consolidate below the 124.70 78.6% retracement of the June/July range
- Our near-term trend bias remains higher in the exchange rate while above 123.00
- A daily close above 124.70 is needed to set off a more important move higher
- A minor turn window is eyed early next week
- A close back below 123.00 would turn us negative again on USD/JPY
USD/JPY Strategy: Like the long side while above 123.00
Price Time Analysis: SP 500
ChartPrepared by Kristian Kerr
- SP 500 continues to meander around the 50-day moving average
- Our near-term trend bias is positive while above 2060
- Traction over 2115 is needed to re-instill upside momentum into the index
- A minor turn windows are seen today and Friday
- A daily below 2060 would turn us negative on the SP 500
SP 500 Strategy: Like the long side while over 2060
Focus Chart of the Day: USDOLLAR
Range trading remains the name of the game in the FXCM USDOLLAR Index (equally weighted basket of USD versus EUR, JPY, AUD, GBP) ahead of the widely anticipated US employment figures on Friday. However, a false head shoulders pattern break to the downside last Friday keeps the index in a positive near-term technical position heading into the data. The index has failed several times over the past few weeks to close above the 78.6% retracement of the April/May range around 12,050 and this remains a clear hurdle to a more important run higher in the buck. If we do ever get that elusive daily close above 12,050 we would expect a re-test of the April highs in relative short order. Any weakness below last week’s low around 11,965 would warn that USD is rolling over and signal a deeper correction is about to unfold.
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— 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.
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
You can receive Paul’s analysis directly via email bysigning up here.
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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