Analys från DailyFX
Technical Weekly: EUR/USD Weekly Key Reversal; Carving a Base?
- EUR/USD weekly key reversal
- USD/JPY weekly doji at trendline
- NZD/USD still a bear and important test for USD/CAD
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EUR/USD
Weekly
Chart Prepared by Jamie Saettele, CMT
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FXTW left 2016 with the following note “sentiment towards the USD in general right now is one of euphoria, specifically against EUR and JPY, so I don’t see how it’s smooth sailing to the downside.” Rough seas make for difficult sailing. EUR/USD continues to trade on a long term parallel and the weekly wicks (key reversal this week) denote active support. I don’t like being a bear in the face of active support at a well-defined parallel…
As always, define your risk points (read more about traits of successful traders here).
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GBP/USD
Weekly
Chart Prepared by Jamie Saettele, CMT
See REAL TIME trader positioning
GBP/USD needs to take out the December high in order to suggest anything meaningful on the upside. Until then, it’s sideways at best. Don’t forget about the 96 month (8 year) cycle low count. Pay attention to the following levels; the former floor in the 1.3500-1.3700 zone and the line that extends off of the 1992 and 1998 highs (hits the 2009 low) near 1.1000.
AUD/USD
Weekly
Chart Prepared by Jamie Saettele, CMT
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“AUD/USD sports good looking symmetry with respect to the time between major lows. It’s one reason that I like the idea of the 2016 low at .6847 holding. The other reason to get bullish in the event of constructive price action on the daily or weekly charts is the relationship between the 2011 high and 2016 low. The .618 absolute retracement of the 2011 high at 1.1080 is .6847 (1.1080 x .618). The 2016 low is .6827.” Over the next few weeks, watch .7000 (maybe just above) for support. Strength through .7535 would be viewed in a bullish light.
NZD/USD
Weekly
Chart Prepared by Jamie Saettele, CMT
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No change for the Bird. “NZD/USD is vulnerable to say the least. The 1985-1993 trendline was resistance in Kiwi from July to November. In fact, price action since July just completed a head and shoulders top. Throw in the fact that 2 of the last 6 weeks are of the outside bearish variety the Bird looks like it’s in for a world of hurt. Also, the entire rally from August 2015 qualifies as a re-test of the long term bear move that began with the double top confirmation in early 2015. The re-test, head and shoulders, and rally from 2015 as a wedge is so textbook it scares me.”
USD/JPY
Weekly
Chart Prepared by Jamie Saettele, CMT
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“USD/JPY may be at or near the end of the first leg of the next bull cycle just as October 1990 was the first leg of the next bear cycle.” This sentiment remains although it’s tough to have faith after Friday’s jam session. The first week of the year ends as a doji. The trendline and well-defined horizontal level (2015 support) indicate potential for a bearish outcome but don’t be stubborn on a breakout. The next level of interest wouldn’t be until roughly 121.00.
USD/CAD
Weekly
Chart Prepared by Jamie Saettele, CMT
See REAL TIME trader positioning
There is nothing new to add to the weekly USD/CAD comments. The May-August trendline is key to the Loonie trade. “The low this week was right at the May-August trendline (wedge line). Despite the bullish outside week, it remains wise to keep the wedge interpretation of USD/CAD strength since May on the table.”
USD/CHF
Weekly (LOG)
Chart Prepared by Jamie Saettele, CMT
See REAL TIME trader positioning
Given probes of a VERY long term parallel beginning in November 2015, this move could end up launching a rally to 1.15 or so (trendline from 1985)…at least. Note too that if this is the beginning of a major CHF devaluation, it will be launched from a running wedge (very bullish). The topside of the wedge could resist near 1.0450. .9950/71 is support and much below there would be cause for concern.
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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