Analys från DailyFX
S&P 500: Notches New Record High, Short-term Techs in Focus
What’s inside:
- The SP 500 notches new record close, but…
- Still has resistance to contend with
- Wedging up between top and bottom-side trend-lines
Yesterday, the market moved higher by a modest amount, notching another record closing print in the SP 500. It’s been tough sledding for the index, but it continues to press on and provide no solid indications for being a bear. Even as such, taking long entries hasn’t been the easiest of task – choppy summer trading conditions are making sure of that.
Despite the new high closing print, resistance in the 2186/89 vicinity has clarified itself as the market stalled around this area on several occasions. With the swing lower on Wednesday, we now have a trend-line off the 8/2 low, which helps provide some guidance. It’s pretty simple, hold on a dip or just even stay above and the trend remains higher. A dip below from right here won’t be an outright bearish indication, though, there is still support in the 2174/78 vicinity from the very tight late July/very early August range. It would require a break below both the trend-line and sustained trade below 2174 and the 2171 pivot created on Wednesday before we could entertain a firm bearish stance. A break below the bottom-side trend-line would be considered an outright short signal in our book if the following pattern fully matures…
Top-side resistance above the before mentioned zone (2186/89) comes in at the trend-line extending off the 7/14 swing high. With the top-side trend-line and recently established trend-line off the 8/2 low, we have the possibility of an ascending wedge should price continue to works its way between the two intersecting lines. If price wedges up nicely into the apex of the pattern, then the market could make a break for it with sustained force (in either direction). We will touch further on this development should it move from potential scenario to reality.
For now, continuing to keep it light and waiting to see how things play out with the current technical developments. Something with clarity should present itself fairly soon. It might be a quick-hitter, but if it has good risk/reward then it may be worth taking a crack at.
Square up your trading with the help of one of our many free trading guides, and if you haven’t already, check out, “Traits of Successful Traders”.
—Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX.
You can email him at probinson@fxcm.com with questions or comments.
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
- Bombs to ”ceasefire” in hours – Brent below $70
- A muted price reaction. Market looks relaxed, but it is still on edge waiting for what Iran will do
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