Analys från DailyFX
Short Set-up Triggered in AUD/CAD
Aussie strength coupled with Loonie weakness has caused the AUDCAD to run far and fast to the upside, but with the charts signaling exhaustion, a near-term short opportunity seems to be at hand.
The Australian dollar (AUD) has continued to strengthen versus the Canadian dollar (CAD), and Friday’s major miss in Canada’s employment change and tick lower in the unemployment rate has propelled the AUDCAD pair even higher.
The dominant trend here is the question: Does the Chinese trade balance and the Reserve Bank of Australia (RBA) omission of “scope for further easing” in the August statement change the trend for the AUD?
On the other side of the pair, how much more will struggling commodities exports and consumer growth weaken the loonie?
That’s the near-term outlook, but it comes in contrast to the third-quarter optimism that, even post-Fed taper, Canadian growth will rebound. So there’s a longer-term outlook that could be the fuel for more downside in this pair.
Guest Commentary: Daily Chart of AUD/CAD
The downtrend in AUDCAD is established, but it’s both Aussie strength and loonie weakness that is creating the correction in the trend. As long as price remains below the 50-period displaced moving average (DMA), I will consider the trend/resistance intact.
The red candles are still dominating, so Friday’s blue (neutral) GRaB candle is not a concern as prices rally into the dynamic resistance of the 34-period exponential moving average (EMA) wave.
The five-minute chart below shows the speed of the 50+ pip move higher, which borders on the extreme of the hourly price movement for the pair. This is a fairly solid indication of an exhaustion point, and in the case of the daily AUDCAD swing short, it puts the move just a little above the conservative short entry at 0.9450.
Guest Commentary: Exhaustion Point for AUD/CAD
By Raghee Horner of TradeForexFutures.com
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
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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