Analys från DailyFX

The S&P 500 Comes Full Circle Ahead of Presidential Election

Published

9 år ago

8 november, 2016

DailyFX

What’s inside:

The SP 500 bounces from confluence of support, oversold conditions on FBI clearing Clinton (again)
We’ve come full circle ahead of the election since the new probe began/ended
Waiting on the outcome to decide what is what, no sense in taking risk ahead of it (levels noted)

In the last post, we were noting several lines of influence intersecting in the 2094/85 region along with the 200-day MA rising up from just a few short handles below. From Thursday’s piece,“even though consecutive down days, in and of itself, doesn’t qualify as an oversold indicator, when we have a confluence of technical events close at hand it increases the odds we will see support act as a springboard.” After nine straight days of losses by the SP 500, the longest streak since 1980, the combination of oversold conditions, significant support, and a bullish catalyst (FBI clearing Clinton) led to the 2%+ surge to start the week.

We’ve come full circle: The bulk of the recent decline starting late last month began on Friday, October 28 when the FBI said it was reinvestigating Clinton’s handling (or mishandling) of emails in light of new evidence. This sent the market reeling from about 2140 in the SP, with it having already effectively priced in a Clinton victory given poll margins. Yesterday’s rally from Friday’s close at 2085 came after the FBI said on Sunday they found no reason to move forward with criminal charges against Clinton, sending the markets up big. The SP 500 closed over 2131. Pretty much back to where we started.

Today is the election, and a lost trading day. It won’t be until early tomorrow morning GMT time we find out who the winner is, Clinton or Trump. It’s in Wednesday’s session we will see how the market feels about the outcome. (Join me tomorrow at 9 GMT for a look at price action following the results.) It looks as though a Clinton victory will be a positive, at least initially, whereas a Trump victory will likely lead to a sell-off, even if only short-lived. It also depends on how clear the results are; if they are extremely close, it won’t be surprising to see the results contested, especially if Clinton wins. If that is the case, it could be weeks before the winner is decided – a scenario which will keep the market on edge until we have a resolution.

In ‘wait-and-see’ mode. We see no point in placing any wagers at this juncture. This time, too, shall pass and we will move on to a more ‘normal’ trading environment where risk/reward will be more favorable.

Levels lines to watch in the days ahead: Resistance lies not far ahead at the 10/10 upper parallel (~2137), the important 8/23 trend-line (~2152) which roughly coincides with the 10/24 high at 2155. An aggressive move above trend-line resistance will find the 9/22 to 10/10 period (~2170/2180). The first area of interest on the downside is in the 2115/20 vicinity, a zone which acted as solid support since September but presented little resistance yesterday. Below there, nothing substantial until the April lower parallel, lower parallel to the 8/23 trend-line, and the 200-day moving average. This cluster of support lies at ~2090 down to 2084.

SP 500: Daily

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—Written by Paul Robinson, Market Analyst

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Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

Published

8 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

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You can follow Paul on Twitter at@PaulRobinonFX.

Analys från DailyFX

Euro Bias Mixed Heading into October, Q4’17

Published

8 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

8 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