Analys från DailyFX
Price & Time:Time To Be Cautious on AUD/USD?
Talking Points
- EUR/USD records new low for the year
- Gold pressuring key support zone
- Next few days critical for Aussie
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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 touched its lowest level since July of 2013 earlier today
- Our near-term trend bias remains lower in the rate while below 1.3010
- The 1st square root relationship of the 2013 low at 1.2855 remains an important near-term pivot with a close below needed to set off a more serious decline
- An important turn window is eyed later in the month
- A close over 1.3010 would turn us positive on the euro
EUR/USD Strategy: Like holding reduced long positions above 105.30.
Price Time Analysis: GOLD
Charts Created using Marketscope – Prepared by Kristian Kerr
- XAU/USD fell to its lowest level since early January early today
- Our near-term trend bias is lower in the meal while below 1247
- A key downside pivot is eyed around 1213
- A cycle turn window of some importance is seen over the next few days
- A close over 1247 would turn us positive on Gold
XAU/USD Strategy: Square.
Focus Chart of the Day: AUD/USD
AUD/USD rebounded off the .8980 61.8% retracement of the year’s range earlier the week. The move higher proved short-lived, however, as the exchange rate fell sharply in the aftermath of the FOMC announcement to record its lowest level in six months today. This action is seemingly very bearish for the exchange rate, but we remain cautiously optimistic over the next few days as the cyclical “tea leaves” suggest that AUD/USD is susceptible to some kind of reversal around this time. We say this because over the next few days the 2011 high in the Aussie will measure 3.14 years at about the same time as the Autumnal Equinox. The 3.14 year interval is an important cyclical relationship that routinely pops up around market turns (the June peak in crude is a good recent example). The Autumnal Equinox is one of the most important times of the year in Gann theory and currency rates in particular have been historically susceptible to turns around this time of the year. We think this cyclical convergence increases the possibility of a turn over the next few days, but we really need to see price action confirm before looking to fade such a clear trend. Idealized turning points are seen at .8920, .8865 and .8835.
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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.
— Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
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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