Analys från DailyFX

S&P 500 in Record Territory, but New Long Entries Need to Be Picked Wisely

Published

8 år ago

18 juli, 2017

DailyFX

What’s inside:

SP 500 trading at new record levels, but have resistance ahead
A short period of consolidation between support/resistance may offer a good long-scenario
Drop back below old highs, Friday low would likely spark short-term downward momentum but could offer pullback opportunity.

Find out what is driving the SP 500 and other global markets this quarter in our Q3 Forecast.

Prior to Friday’s breakout to new record levels we laid out scenarios which could happen around the highs set in June. The bullish scenario first involved seeing the SP 500 break to new record highs, but wouldn’t be centered around paying up and buying new high prices. This hasn’t been the most fruitful way to enter the market, and often times resulted in failed breakouts before seeing new record levels achieved. The best tactical approach over the years for entering equity indices has been on pullbacks.

The SP is trading not far above the June 19 high at 2354, so any pullback from here would be rather shallow if the old high holds. Nevertheless, if a test of former highs is successful then it could lend to an entry with a stop placed below the swing-low on the retest. The issue longs will quickly face in this scenario, though, is resistance closely positioned overhead in the form of the March top-side trend-line and underside of the November slope. This makes the current situation a bit tricky.

The top-side lines aren’t considered the most steadfast given they are moving in the same direction of the trend, but can still be problematic if the market doesn’t find the fuel to push through. A more ideal scenario would be if the SP can consolidate between the old highs and noted lines of resistance. The holding of new highs and coiling price action could provide the fuel needed to bust through the upwardly sloping lines.

Should we see the SP fall back below the old highs at 2354 and take out the Friday low at 2446, then the failure could lead to short-term down-side momentum at the least. But at some point this might be a good scenario for loading up on a long for another push higher, assuming we don’t see too aggressive of a decline. The trend-line from May extending under this month’s low may be a spot we see buyers step up on weakness should we see price action play out in this fashion.

The bottom line is this: Appetite for stocks is still very much alive, but traders need to be careful about how they enter the market at this juncture.

SP 500: Daily

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—Written by Paul Robinson, Market Analyst

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Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

Published

7 år ago

30 september, 2017

DailyFX

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.

Analys från DailyFX

Euro Bias Mixed Heading into October, Q4’17

Published

7 år ago

29 september, 2017

DailyFX

Euro Bias Mixed Heading into October, Q4'17

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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Analys från DailyFX

British Pound Reversal Potential Persists Heading into New Quarter

Published

7 år ago

29 september, 2017

DailyFX

British Pound Reversal Potential Persists Heading into New Quarter

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