Analys från DailyFX
US Dollar Range Holding, SPX 500 Rally May Be Losing Steam
Talking Points:
- US Dollar Still Consolidating Above Familiar Trend Support
- SP 500 Bullish Momentum Might Be Starting to Dissipate
- Crude Oil Turns Lower as Expected, Gold Prices May Follow
Can’t access to the Dow Jones FXCM US Dollar Index? Try the USD basket on Mirror Trader. **
US DOLLAR TECHNICAL ANALYSIS – Prices are still struggling to find direction, with trading locked in a narrow consolidation range above support at a rising trend line set from September 2012. A break above resistance at 10614, the 23.6% Fibonacci expansion, initially exposes the 38.2% level at 10673. Trend line support is now at 10559, with a reversal below that eyeing the February 17 low at 10520.
Daily Chart – Created Using FXCM Marketscope 2.0
** The Dow Jones FXCM US Dollar Index and the Mirror Trader USD basket are not the same product.
SP 500 TECHNICAL ANALYSIS – Prices recovered above the 23.6% Fibonacci expansion at 1863.60 to test rising channel top resistance at 1879.40. This barrier is reinforced by the 38.2% level at 1881.30. A break above the latter boundary exposes the 50% Fib at 1895.70. Emerging negative RSI divergence warns of ebbing bullish momentum and hints a turn lower may be ahead however. Sliding back below 1863.60 opens the door for another test of the channel floor, now at 1847.40.
Daily Chart – Created Using FXCM Marketscope 2.0
GOLD TECHNICAL ANALYSIS – Prices put in a bearish Dark Cloud Cover candlestick pattern below resistance at a falling trend line set from April 2013, hinting a turn lower may be ahead. Negative RSI divergence bolsters the case for a downside scenario. Breaking below the 23.6% Fibonacci retracement at 1313.14 exposes the 38.2% level at 1287.48. Trend line resistance is now at 1356.08.
Daily Chart – Created Using FXCM Marketscope 2.0
CRUDE OIL TECHNICAL ANALYSIS – Prices turned lower as expected after forming a bearish Dark Cloud Cover candlestick pattern. Sellers have moved to challenge support at 101.73, the December 27 high, a barrier reinforced by the 38.2% Fibonacci retracement at 99.85. A break below the latter level exposes the 50% Fib at 98.20. Alternatively, a turn back above the 23.6% retracement at 101.89 eyes rising trend line support-turned-resistance at 103.15.
Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
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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
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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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