Analys från DailyFX
The Importance of Gaps and Trading Australian Dollar Crosses
- EURUSD and USDJPY; mind the gaps!
- Australian Dollar breaking down
- Exploring exotic opportunities
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Daily
Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0
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-EURUSD has broken the trend channel that defines action from the July low. My interpretation of this development is that the major trend has turned at least sideways, and maybe down (see last week’s writing on false EURUSD bullish breaks in recent years).
-Significant levels (the channel in the current situation) are sometimes re-tested from the opposite side of the market. The underside of the channel crosses about 1.3475 to 1.3510 next week.
-The previously uncovered 9/13 close was filled on Thursday and the EURUSD made an inside day on Friday. This combination is short term bullish.
Trading Strategy: I do not have a position at the moment. A week or so of upside into 1.3475-1.3510 might offer an opportunity to get short though.
Daily
Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0
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-USDJPY traded above 99 (Oct high) and into the previously uncovered 9/20 close on Thursday. There is an uncovered close from the 10/25 close at 97.37.
-Kristian Kerr and I spoke at length about JPY and AUD during a ‘Google Hangout’ on Thursday. Important levels on a daily closing basis are 99 and 96.50 (October range).
Trading Strategy: “This market is coiled for a big move to end the year. Triangles are usually continuation patterns but it’s possible that the eventual break ‘surprises’ to the downside. We’ll trade it either way when it’s ready.” Apparently, the market is not ready. Remember, 96.50 and 99 on a daily closing basis need to be seen before we can even think about participating. Even then, a proper setup is required. What constitutes a proper setup? A break of support/resistance and re-test of that level from the opposite of the market tend to offer the best reward/risk entries.
Daily
Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0
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-It is possible that the EURJPY has completed an ending diagonal pattern from the June low. Such patterns often give way to violent reversals and full retracement of the pattern. The action fits so far and
-If an ending diagonal is indeed complete then expect resistance from former lows and the underside of the broken trendline near 132.60.
-Be aware of uncovered closes at 130.56 and 129.66.
Trading Strategy: The target from a completed diagonal is the origin of the diagonal, in this case that is the June low at 124.95. I will monitor for resistance near 132.60-133.20. The 11/6 high at 133.72 is the point at which I would abandon the ending diagonal pattern in this form.
Weekly
Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0
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-AUDUSD has followed through on the reversal that ended the week of 10/25. 10/23 was the day of the top and an outside day reversal formed that day.
–Bigger picture, the market broke from a symmetrical triangle the week that ended 5/17/2013. The recent top is just pips from that close level (with an outside day reversal on 10/23) and right at channel resistance.
-The rally from the June low forms 2 converging lines and can be called a pennant. These patterns are often seen in the early stages of large bear markets.
Trading Strategy: Currently short. Original stop was .9550. Stop has been lowered to .9375. .9190-.9300 could produce consolidation / corrective activity.
Daily
Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0
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-A triple trendline (one is a channel) confluence has held as support. In Elliott, the decline from the August high would be considered a 4th wave decline. A new high (above 1.5030) is favored.
-Thursday’s bullish reversal supports the call for a significant low.
Trading Strategy: Am currently long with a stop under 1.4050.
AUD/JPY
Daily
Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0
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-AUDJPY broke a 2 month trendline in late October. The underside of the line served as resistance for 3 days.
-A weekly key reversal unfolded the week that ended 10/25.
-The market is consolidating around a 92.90. This level has proved an inflection point on several occasions in 2013 (circled).
Trading Strategy: Am currently short with a stop at 93.50 (was tightened to 93.15 intraday). Target area is 90.70-91.00.
Daily
Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0
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-USDMXN reversed sharply today. Price remains within what may be an ascending triangle since June.
-Watch for support at recently broken resistance levels at 13.05 and 13.10.
Trading Strategy: Was trailed out of the longs at 13.18 (from 13.10, stop was 13.07) and will revisit long ideas if price shows signs of support near 13.05. The market is in a range…so trade it like a range! Those that front run a breakout will get burned (and probably did today-same goes for USDJPY…or anything).
Daily
Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0
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–USDNOK broke above a 3 year trendline in June. The topside of that line was tested as support in September (the test was in the form of a spike on ‘no-taper’).
-This week, price broke through the trendline that crosses the tops (exactly) of 7/5, 9/5, and 10/10.
-Recently broken resistance at 6.0730 is estimated support next week.
Trading Strategy: Looking for a low near 6.0730. If that fails, then this market might return to the trendline (from above).
Daily
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-USDZAR backed off from channel resistance on Friday. The high is also in line with the June high.
-Price made an outside day on Friday.
-It is possible that a significant top is forming (peaks in June, August, and now?)
Trading Strategy: I will turn bearish below Friday’s low.
— Written by Jamie Saettele, CMT, Senior Technical Strategist for DailyFX.com
To contact Jamie e-mail jsaettele@dailyfx.com. Follow him on Twitter @JamieSaettele
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.
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
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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