Analys från DailyFX
S&P 500: Last Stand for Shorts, Chart Beginning to Tilt Higher
What’s inside:
- SP 500 challenging trend-line off record high
- Bearish case hinges on the market staying below, else picture starts turning positive
- Levels and lines under consideration
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On Tuesday, we asked if Monday’s rally was as good as it gets for the week. Our bias has been towards lower prices, as we’ve been operating off the notion of seeing the SP 500 head towards a lower low beneath the March low of 2322, but so far it has managed to hold above despite the sequence of lower highs since the record high notched on March 1. We’ve yet to see a lower low. Last Friday’s low arriving above the March low may turn out to be the opposite, as a higher low may be in place, potentially marking the beginning of a once bearish sequence turning bullish.
More downside could be in store, though, but if that is to be the case then we want to see the top-side trend-line hold as resistance. This pretty much means yesterday should be as good as it gets this week, and over the short-term in general if the slightly bearish tilt to the chart is going to be maintained. A cross beyond the upper trend-line doesn’t give the ‘all-clear’ for longs, but it would certainly strengthen the case that the correction since early March has concluded. If the market turns lower right here, right now we still view the 2300 area as a possible spot for the decline (correction) to end. A break above both the top-side trend-line, recapturing of the November trend-line, and higher high above the April 5 swing high of 2378 would be the ‘all-clear’ signaling in our book that a new leg higher is underway.
All-in-all, the case for lower prices is still intact, but barely. The market needs to turn lower pronto or else we will be looking to change gears towards a market rally.
SP 500: Daily
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—Written by Paul Robinson, Market Analyst
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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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