Analys från DailyFX
Price & Time: Was Wedensday’s Reversal in Gold Meaningful?
Talking Points
- EUR/USD nearing important resistance zone
- NZD/USD at cycle turn window
- Gold showing signs of a reversal
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Foreign Exchange Price Time at a Glance:
Price Time Analysis: EUR/USD
Charts Created using Marketscope – Prepared by Kristian Kerr
- EUR/USD punched above the 61.8% retracement of the October/November decline at 1.3625 earlier today to trade to is highest level in over a month
- Our near-term trend bias is positive on the Euro while over 1.3480
- A daily close over 1.3625 is needed to inspire a further push higher towards 1.3710 and above
- An important cycle turn window is in effect over the next few days
- Only a daily close below the 3rd square root progression of the year’s high at 1.3480 will turn us negative on the Euro.
EUR/USD Strategy: Favor the long side while over 1.3480
Price Time Analysis: NZD/USD
Charts Created using Marketscope – Prepared by Kristian Kerr
- NZD/USD traded to its lowest level since mid-September last week before rebounding from just below the 5th square root relationship of the October high near .8100
- Our near-term trend bias is lower in the Bird while below .8275
- The .8180 area is interim support, but weakness below .8100 is really required to signal a resumption of the medium-term downtrend
- A cycle turn window is in effect over the next three days
- A daily close back over .8275 would shift our near-term trend bias to positve in the Kiwi
NZD/USD Strategy: Favor the short side while under .8275
Focus Chart of the Day: GOLD
In our weekly outlook webinar on Tuesday we spoke at about the possibility for a reversal in Gold as Monday and Tuesday were a potential turning point using one of our “newer” Gann cyclical methods. Interestingly, the low close in the metal was in fact Monday. We recognize that new intraday lows were made in Gold yesterday before the move higher, but intraday action does not negate a turn window. In fact sharp intraday swings are quite a common charactersitic in Gold around turning points. The August high, for example, did something similar and this is a major reason why we analyze the metal on a daily close basis. How important Monday’s cyclical low proves to be now depends on the metal. Key resistance is seen at last week’s high of 1258 with traction above needed to signal that a more important reversal is unfolding here. A daily close back under 1219 would invalidate the burgenong positive cyclicality and refocus lower.
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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
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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
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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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