Analys från DailyFX
Price & Time: What Next For the Euro?
EUR/USD fails after breaching last quarter’s high while GBP/USD stalls at important Fibonacci resistance. Gold still in consolidation mode.
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Foreign Exchange Price Time at a Glance:
Price Time Analysis: USD/JPY
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/JPY is re-testing important Gann resistance in the 98.75 area after several days of consolidation
- Our near-term trend bias remains positive in USD/JPY while over the 1×1 Gann angle line of the February low in the 97.00 area
- A close over 98.75 will be important and should set the stage for a more important move towards 99.50 and beyond
- Today and Tuesday are minor cycle turn windows
- Weakness below 97.00 on a closing basis would turn us negative on the rate
USD/JPY Strategy: Like the long side while over 97.00
Price Time Analysis: GBP/USD
Charts Created using Marketscope – Prepared by Kristian Kerr
- GBP/USD traded to its highest level in 2-months on Wedensday before encountering resistance at the 100% projection of the mid-July advance near 1.5725
- While over a Gann line convergence near 1.5500 our near-term trend bias will remain higher
- The 1.5725 level is now a key upside pivot with strength above needed to instigate another important move higher in Cable
- A cycle turn window is seen around the first half of next week
- Weakness below Gann support in the 1.5500 area would undermine the postive tone in the rate and turn us negative on the Pound
GBP/USD Strategy: Like only small longs while over 1.5500.
Price Time Analysis: GOLD
Charts Created using Marketscope – Prepared by Kristian Kerr
- XAU/USD remains in consolidation mode below the 6th square root progression of the year-to-date low in the 1384 area
- While over the 4th square root progression of the year’s low at 1317 our near-term trend bias will remain higher
- The 1384 level remains key on the upside with traction above needed to trigger another important move higher
- A minor cycle turn window is seen early next week
- Weakness below 1317 on a closing basis would undermine the positive structure and turn us negative on the metal
XAU/USD Strategy: Like the long side whilst over 1317.
Focus Chart of the Day: EUR/USD
EUR/USD traded to its highest level since mid-February on Tuesday. On this latest run higher the Euro finally managed to break the 2Q13 high of 1.3415 on an intraday basis and by a few pips on a daily closing basis. Such action is very difficult to interpret especially when you take into account the fact that intraday breaches of quarterly highs often lead to aggressive counter trend reactions. (Case in point: the price action over the past two days). With a medium-term cycle turn window due around the middle of next week we will need to see how the rate reacts during this period. Any renewed strength that fails around 1.3415/30 on a closing basis would be very negative while a close over this zone will put the single currency in a very positive position. Weakness below 1.3220 would warn that a top has already been seen.
— 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.
Looking for a way to pinpoint sentiment extremes in the Euro 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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