Analys från DailyFX
S&P 500 Technical Analysis: Looking to Put Bearish Scenario to Rest
What’s inside:
- Global risk appetite healthy to start the week
- SP 500 looking to put to rest one bearish possibility
- Break above 2480 clears path to new record highs.
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Recently we’ve made mention of one possible bearish scenario – ‘head-and-shoulders’ top. The keyword being, “scenario”. This is what we had to say in our weekly equity market forecast, “There is still a small possibility we see a ‘head-and-shoulders’ top come to fruition, but until we see the market pick up steam to the downside and solidify the ‘right shoulder’ it’s only a passing scenario at this time. Appetite for risk remains stable and with that a move towards new record highs still has good odds.”
To start the week in Asia and Europe we are seeing good buying, as the Nikkei closed up 1.41% and the DAX and CAC are each sporting 1%+ gains at this time. Both of those key European indices are also breaking above key thresholds.
U.S. index futures are indicating a strong open at the time of this writing, with the SP 500 trading higher by 12.50 handles to 2473.50, Dow rising 115 to 21893, and the Nasdaq 100 contract up 42.5 to 5967.
With a little more buying the 9/1 Friday high at 2480 will likely get exceeded, opening up a path for the intra-day record high at 2491. A clean break to new highs could bring into play a top-side trend-line which at this time doesn’t arrive until ~2520/30. A failure today would of course put pause into this notion, but at this time there still looks to be another leg higher coming in the market. A failed move higher followed by a break of last week’s low at 2446 would have us shifting into reverse, at least temporarily.
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SP 500: 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
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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