Analys från DailyFX

S&P 500 Technical Outlook – Headline Risk Threatens Constructive Posturing

Published

7 år ago

8 juni, 2017

DailyFX

What’s inside:

SP 500 hanging out near highs, mini reversal day yesterday may have ended minor pullback
A period of further consolidation may be the best-case scenario for driving through resistance
Headline risk: ECB, Comey testimony, UK General Election threaten near-term

Looking for a longer-term view on the SP 500? Check out our market forecasts.

On Tuesday, we asked, “Will buyers step up on near-term weakness”. The SP 500 was modestly gapped lower that morning and never really gathered its footing, closing near the worst levels of the session. Yesterday, the market took an early afternoon dive, but dip buyers showed up and put in a small reversal day. Given how strong the market has been it would be unsurprising if that is all we get before pushing to a new high. In the short-term we’ll use yesterday’s low at 2425 as support.

It won’t take much of a rally from here to record a new record high, but there is resistance aside from the high to contend with. The trend-line passing over from the February 2015 high and March 1 high has so far been a point of interest. We noted the other day that given the proximity of inflection points (over 2 years apart) gave initial pause to whether the trend-line would be influential or not. So far it has had some influence, but nothing significant. If the market is indeed as strong as it appears then it shouldn’t be much of a hurdle to overcome. A daily close above Friday’s record high at 2440 will also put the market slightly over the topside trend-line. If this becomes the case, then we will look to that line as support moving forward.

From a tactical standpoint, buying on dips is the favored approach (as is typically the case). If the market doesn’t propel higher after this week’s mini dip and reverse, a period of consolidation may develop – which would be a good thing. A high-level consolidation could set the market up for a stronger move higher than if it were to carve out a new high here in the next couple of days. For now, as long as yesterday’s low isn’t breached on a closing bar basis, then we remain short-term constructive. A drop back lower wouldn’t necessarily be a bearish development, assuming it isn’t aggressive move, but would present caution until we found another support level to lean on. The November slope in this case would be a good spot for the SP to hold onto.

SP 500: Daily

Heads up: Former FBI Director James Comey will testify today regarding Trump and Russia, beginning at 14:00 GMT time. At the least expect sporadic intra-day volatility. The ECB is upon us at the time of this writing and could cause volatility in the DAX, and ultimately risk appetite in the short-run should Draghi’s tone be strongly hawkish or dovish. Expectations appear to be mixed. Today is the UK General Election, with results to impact tomorrow’s trade. Markets are currently set up for a Conservative victory, which may provide a little boost to risk appetite should this prove to be the case. However, in the event of a Labour victory/hung parliament ‘risk-off’ a probable theme tomorrow, but would likely be short-lived for non-UK markets.

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—Written by Paul Robinson, Market Analyst

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You can follow Paul on Twitter at @PaulRobinonFX.

Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

Published

7 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

You can receive Paul’s analysis directly via email bysigning up here.

You can follow Paul on Twitter at@PaulRobinonFX.

Analys från DailyFX

Euro Bias Mixed Heading into October, Q4’17

Published

7 år ago

29 september, 2017

DailyFX

Euro Bias Mixed Heading into October, Q4'17

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

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Analys från DailyFX

British Pound Reversal Potential Persists Heading into New Quarter

Published

7 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

To be added to Christopher’s e-mail distribution list, please fill out this form