Analys från DailyFX
Technical Weekly: EUR/USD Outside Week Follows Narrow Range Week
- -EUR/USD outside week follows the narrow range week
- Commodity currencies probe big zones
- USD/ZAR breaks 5 and a half year trendline
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EUR/USD
Weekly
Chart Prepared by Jamie Saettele, CMT
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Last was the smallest non-holiday weekly range since September 2012. This week was an outside week (although didn’t close on the highs). The current dynamic is the exact opposite of what happened in September 2012 (tiny weekly range and an outside week…circled on the chart). Price wise, EUR/USD is fighting against 1.0820/50, which was support in 2015 and 2016. It’s a big level but consider upside as long as above this week’s low due to the mentioned small range, outside week dynamic. If this week’s low is taken out then I’d still watch for support near 1.0462-1.0539 (2015 lows). Remember the weekly RSI comment – “the fact that the indicator has turned up from above 30 is a positive but pay attention to the 60 value for resistance.”
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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. “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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.7700-.7835 is going to be a battle for bulls. The zone is defined by long term parallels, upper end of the 2016 range, and underside of former trendline support. I think the level gives way but don’t know when (if you have an idea, please share). Remember, the relationship between the 2011 high and 2016 low is one reason why I’m treating everything since the 2016 high as consolidation within a new bull trend. “The .618 absolute retracement of the 2011 high at 1.1080 is .6847 (1.1080 x .618). The 2016 low is .6827.”
NZD/USD
Weekly
Chart Prepared by Jamie Saettele, CMT
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Kiwi is similar to Aussie in that the broader trend is higher but the market faces resistance right now. There is a good deal of horizontal consideration for supply between .7327 (highest 52 week close) and .7485 (2016 high). Original channel resistance (line slope based on 2015 and 2016 lows) is up here too. The zone is bolstered by lows in 2011 and 2012 as well (see to the left of the chart). I don’t like being bullish into such a big zone.
USD/JPY
Weekly
Chart Prepared by Jamie Saettele, CMT
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“Strength of the prior trend probably necessitates a more drawn out corrective process. In the event of a break, 109 would be in play.” I’m sticking with the ‘drawn out process’, meaning that USD/JPY is neither overly bullish nor bearish but rather range. The trendline / horizontal level above price and 110.67-111.90 range below price make for solid range barriers. Abandon ship below 110.25 though (11/22 low).
USD/CAD
Weekly
Chart Prepared by Jamie Saettele, CMT
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USD/CAD continues to probe 1.3000 from above. Price traded under the figure 3 of the last 4 days but closed above each day. I’d like to say then that 1.3000 is important but even a close below would still face the mid-1.2800s. Broadly speaking, the rally from May 2016 is corrective so the bias is for impulsive weakness but don’t discount rallies against the trend as long as price is holding the parallels (dotted lines).
USD/CHF
Weekly
Chart Prepared by Jamie Saettele, CMT
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For the 3rd year in a row, USD/CHF is trading at the 55 week average in early February. All this means is that price action has been dreadful for quite some time. The 6+ year trendline is close on log scale (.9850) but lower on arithmetic scale. The top side of former trendline resistance should also be watched for a response…it too is slightly lower. Previous comments are valid. “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. 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.”
Bonus Chart
USD/ZAR
Weekly
Chart Prepared by Jamie Saettele, CMT
See REAL TIME trader positioning
USD/ZAR (South African Rand) has broken trendline support. I presented short USD/ZAR in December as a ‘top trading opportunity for 2017’. Check out the free report here.
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
To be added to Christopher’s e-mail distribution list, please fill out this form
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