Analys från DailyFX
Short USD/SEK Near Key Resistance Level
Talking Points:
- 61.8% Retracement from October High
- Testing Broken Trend Line Resistance
- Potential Short Set-up in USD/SEK
The US dollar (USD) has retraced 61.8% of the leg down against the Swedish krona (SEK) since the October high just above 6.70 level. Now, USDSEK is facing a lot of resistance just below 6.60, including the long downward trend since the peak in April of last year and the shorter, positive trend line, which was broken in December.
See recent: A ”Make-or-Break” Scenario for USD/SEK
Once again, we do see a slight pullback in USDSEK from the downward trend line, which has acted as resistance several times since the peak above 6.85 in April 2013. Furthermore, USDSEK broke its shorter, positive trend line in December, which is now being tested from below, as seen on the chart.
Guest Commentary: Technical Outlook for USD/SEK
Support: 6.45, 6.37-6.30, 6.30
Resistance: 6.60, 6.70, 6.85
In addition to the trend line that’s now being tested as resistance, USDSEK has also retraced 61.8% of the move down from the October highs. With all these levels around 6.60, the pair is very likely to either continue the shorter-term downtrend (in place since October) by making lower highs and lower lows, or put in a decent pullback in order to build up more momentum and potentially break the current resistance area.
The level to watch on a possible pullback is the support zone between 6.50 and 6.45. However, 6.45 remains the critical support level in USDSEK. A break below this level will suggest a new test of the 6.30 area.
To the upside, we need to break 6.60-6.65 and hold above this area to attract further upside. If so, we might revisit the 2013 highs around 6.85.
Potential Short Trade in USD/SEK
Using half the desired position, short USDSEK at current levels (6.55-6.60), and traders can then add to the short position if/when we see a bearish reversal signal on the chart. The stop-loss should be executed if USDSEK closes above 6.65 on the daily time frame.
There are two price targets for this trade, the first one being the critical support area around 6.45. If this target is reached, take 50% off the table and put a stop loss on the average price, looking for further downside to our second and final price target around 6.30.
By Rafiul Hossain, Guest Analyst, DailyFX.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.
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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