Analys från DailyFX

S&P 500 Takes a Shot, Snap-back or More Downside to Finish the Year?

Published

8 år ago

29 december, 2016

DailyFX

What’s inside:

SP 500 drops below Feb 11 trend-line
Puts bottom-end of range and lower parallel in play
Only two days to go, waiting for calendar flip before taking on risk again

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On Tuesday, we looked at the SP 500 and said through year-end it looked as though the index would trade steady to higher. During Wednesday’s session, however, the market had a different idea and traded higher for less than 2 minutes (literally) before dropping over 20 handles to close near the day’s lows.

Yesterday’s decline resulted in a clean break of the Feb 11 trend-line we had been looking to as support during the ongoing range. The next level of near-term support could be put to the test today at the recent range lows of 2248 created on 12/14. If an immediate bounce doesn’t unfold from that low, then we will watch how the market responds around minor support at the lower parallel (~2245) married to the top-side trend-line off the highs. The market could find a bid here soon after yesterday’s drop, but the fact the trend-line off the November low was broken last week and the February trend-line gave-way yesterday does add some hesitation. If we are to see downside follow-through, there is nothing substantial to the left on the charts, possibly bringing into focus the top-side trend-line off the November 2015 peak. It’s another 20 points lower, though, so with yesterday’s drop included it would be an aggressive move.

We’re reluctant to make much of yesterday’s decline as a directional bias is somewhat out the window at this juncture with a heightened risk for unpredictable swings in an illiquid, holiday trading environment. We’ll wait for the calendar to flip to see which way things want to unfold when full market participation returns. Still residing in the camp of higher before lower in early January, but making a wager on that right now doesn’t look very appealing from a risk/reward standpoint. We’ll stand aside until after the New Year festivities.

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

8 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

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Analys från DailyFX

Euro Bias Mixed Heading into October, Q4’17

Published

8 år ago

29 september, 2017

DailyFX

Euro Bias Mixed Heading into October, Q4'17

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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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Analys från DailyFX

British Pound Reversal Potential Persists Heading into New Quarter

Published

8 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

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