Analys från DailyFX
Technical Weekly: AUD/USD Shows Signs of Struggle
- EUR/USD responds at a big level
- AUD/USD signs of struggle at long term resistance
- USD/JPY respecting big levels on both sides
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EUR/USD
Weekly
Chart Prepared by Jamie Saettele, CMT
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“Watch for support near 1.0462-1.0539 (2015 lows).” Low this week was 1.0520, which is a few ticks under the December 2015 low. The ‘response’ at the level is promising in the context of a possible EUR/USD basing pattern but nothing more. Price action is muted to put it lightly and so are my opinions. As noted last week, “I think that EUR/USD is bottoming but am unsure if the low is in. A reversal on the first day, week, and month of the year is the best way for a market to reverse a major trend but upside from the low isn’t impressive (couldn’t even register an RSI above 70 on the daily for example).”
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GBP/USD
Weekly
Chart Prepared by Jamie Saettele, CMT
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There is no change to the long term GBP/USD comments, which continues to consolidate above the 13 week average following a sharp reversal. “Cable has followed through on the weekly reversal and closed above the 13 week average. The high is at the November high and a long term parallel so it could take some time to work out the kinks before an extension higher. The long term cycle is the most intriguing of all. “Did the 96 month (8 year) cycle low count just nail a major GBP/USD low (cycle is in February but give this some wiggle room)?
AUD/USD
Weekly
Chart Prepared by Jamie Saettele, CMT
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A key reversal (small range however) unfolded in Aussie. The prior week formed a doji. The view that an important bullish base has formed remains but the action of the last 2 weeks at resistance (.7700-.7835) warns of a pause in what has been the trend of 2017. Keep the RSI comments from last week in mind…”Weekly RSI has peaked at/near 60 on every bounce since after the 2011 peak. RSI at the 2 most recent lows (January 2016 and January 2017) are near 40, which is a positive. In other words, the momentum profile has improved which increases risk of an upside break.”
NZD/USD
Weekly
Chart Prepared by Jamie Saettele, CMT
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Kiwi remains capped by the upper end of its 2016 range and a channel line. Peaks in NZD/USD since the summer have been anything but clean but that may be changing as Friday’s high was right at the December high. Clean reactions at clean levels is a plus. I lean towards the downside with focus on the 55 week average (maybe a bit below).
USD/JPY
Weekly
Chart Prepared by Jamie Saettele, CMT
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USD/JPY range levels continue to play out. The high this week was the same price that was resistance in February 2016 (almost 1 year exactly…high last year was on 2/16…this week the high was on 2/15). I don’t consider the long upper wick on the weekly candle as a bearish characteristic because price is near the bottom of its range. A reversal bar implies reversal from a trend and in this case there is no trend to reverse. “The trendline / horizontal level above price and 110.67-111.90 range below price make for solid range barriers.”
USD/CAD
Weekly
Chart Prepared by Jamie Saettele, CMT
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USD/CAD is still stuck although the inside week at support is promising for a low. Loonie remains above long term parallels. From a momentum perspective, RSI failed at 60 on the latest rally. This characteristic is associated with either a downtrend or sideways trend. Also, the rally from May 2016 is corrective so the bias is for impulsive weakness but I don’t like being bearish into support (parallels).
USD/CHF
Weekly
Chart Prepared by Jamie Saettele, CMT
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I’m still content to ‘think higher’ into late February/early March as Swissie has tended to top during that time period the last several years. “Broad upside potential is possible as long as price is above the 2011-2014 trendline. The trendline is near .9850 on log scale and just above .9700 on arithmetic (shown here). The topside of the wedge is worth knowing near 1.0450 (line off of 2012 and 2015 highs). Essentially, the wedge barriers are all I care about…all else is noise.”
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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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
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