Analys från DailyFX
S&P 500 Remains Constructive, Nasdaq 100 Attempting to Build Bullish Pattern
What’s inside:
- SP 500 reversed Monday after falling through 8/8 high to keep upside intact
- Nasdaq 100 holds April trend-line, possibly building an ascending wedge
- Overall bias is bullish as long as recent lows hold
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On Monday, we saw the SP 500 drop below the 8/8 intra-day record high on the back of tension flaring up yet again between North Korea and the U.S., but the dip was bought and resulted in the market closing with a minor reversal day and back above the August high. As we discussed in the Tuesday’s webinar, this keeps our focus on the top-side and sideways at worst as long as the Monday low at 2488 holds. Turning our focus higher, the next area we’re looking to as resistance comes in over 2520, where a top-side trend-line extending higher since March arrives. If may not be the most substantial form of resistance, but could at least put a pause in any upward momentum we see from here. Beyond the March line another 15-20 handles higher is the June top-side trend-line. As long as 2488 holds so does a bullish bias. Should that break then we would be forced to reconsider the near-term outlook.
SP 500: Daily
For the following scenario to take shape in the Nasdaq 100 we will need a little more time, but soon an ascending wedge could take form. Given the nature of ascending wedges (higher lows, flat tops) and the overall trend, a top-side breakout would be the most likely outcome. We’ll revisit again soon should the formation mature towards becoming a reality. But for now, like the SP, as long as the Monday swing-low at 5840 holds then the index looks poised for higher prices. The Monday swing lower found support by way of a trend-line rising up from April, so this will become an increasingly important line to watch. The next area of resistance to worry about comes in around the psychological 6k level.
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Nasdaq 100: Daily
—Written by Paul Robinson, Market Analyst
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You can follow Paul on Twitter at @PaulRobinonFX.
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
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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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