Analys från DailyFX

Title: USD/CAD Technical Analysis: CAD Building Momentum Into LT Support

Published

9 år ago

9 december, 2016

DailyFX

Talking Points:

USD/CAD Technical Strategy: Chart Support Eroding on Canadian Dollar Momentum
Bank of Canada disappoints CAD bears as inflation signs help lift CAD
USD/CAD pushing into pivotal 1.30/31 zone

Quick Fundamental Take: USD/CAD has had one of the most impressive runs that is not aligning with broader G10FX post-election. By looking at the Dollar Index (DXY), you can see an aggressive rally that has provided a little fodder for DXY bears. Much of the rise can be attributed fundamentally to the widening of sovereign yield spreads against other major counterparts like Japan (who has pegged the 10Y JGBP to 0%) and the German Bunds, which took a sharp move lower after the ECB pledged to extend QE to December 2017 on Thursday.

Having a Hard Time Trading USD/CAD? This May Be Why

Despite the fundamental backing for USD strength, which is shown in the DXY, the Canadian Dollar has continued to gain against the greenback since November with a ~450 pip range as of Friday morning. Much of the run as to do with the price of Oil and the unwillingness of the Bank of Canada to loosen monetary policy further to extend a hand to exporters.

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Technical Focus:

D1 USD/USD: Momentum Into LT Support (100-DMA, Ichimoku Cloud, 7-Month Trendline

Chart Created by Tyler Yell, CMT

The Canadian Dollar has strengthened by ~3.2% over the last month after touching the 50% retracement of the 2016 range at 1.3575. For the time being, the burden of proof is on USD/CAD Bulls as the price sits below shorter-term resistance like the 50-DMA and H4 Ichimoku Cloud.

However, we’re also sitting above longer-term resistance like the 100-EMA (1.3190), Daily Ichimoku Cloud (1.3230), and a trendline drawn off the May and August lows.

The current consolidation has shown little signs of reversing, and we will favor further short-term CAD strength against the USD and other weaker currencies as USD/CAD remains below weekly opening range high of 1.3357 and November 22 low of 1.3378.

The longer-term chart shows a polarity zone in effect between 1.3176-1.29 where a majority of the price action on the post-May rebound has taken place. If the price continues to work through this zone of support despite US Dollar strength vs. other G10 pairs, we could be working on more pronounced Canadian Dollar strength that will be easily recognized against weaker currencies like the JPY, EUR, and possibly the GBP.

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For now, only a breakout above 1.3357/78 would open up Bullish targets of 1.3537 followed by the November 14 high near the 50% retracement of the January-May range at 1.3589. If 1.3589 breaks, we’ll be on the watch of the 61.8% retracement of the same range at 1.3838. Until then, the Canadian Dollar appears to be a stalwart that isn’t worth fighting, but following.

Key Short-Term Levels as of Tuesday, December 9, 2016

T.Y.

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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

You can receive Paul’s analysis directly via email bysigning up here.

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