Analys från DailyFX
US Dollar, S&P 500 Recoveries Lose Steam at Chart Resistance
THE TAKEAWAY: The US Dollar and the SP 500 failed to meaningful build on recoveries launched at the end of last week as prices ran into the first layer of technical resistance.
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US DOLLAR TECHNICAL ANALYSIS– Prices moved lower as expected after putting in a Bearish Engulfing candlestick pattern. A recovery has been mounted from a support cluster in the 10510-576 area, marked by the 38.2% Fibonacci retracement, the March 8 high, and a rising trend line set from mid-December 2012. A break above initial resistance at 10655 exposes the next upside barrier at 10697. Alternatively, a push below 10510 exposes the 50% Fib at 10397.
Daily Chart – Created Using FXCM Marketscope 2.0
SP 500 TECHNICAL ANALYSIS – Prices bounced after putting in a bullish Piercing Line candlestick pattern at a support cluster marked by the 23.6% Fibonacci retracement (1605.90) and a rising trend line set from mid-November 2012. A push above channel resistance (now at 1641.80) initially targets the 32.8% Fib expansion at 1655.40. Alternatively, a drop below the 1605.90 figure aims for the channel bottom at 1595.20 and the 38.2% retracement at 1555.50.
Daily Chart – Created Using FXCM Marketscope 2.0
GOLD TECHNICAL ANALYSIS – Prices moved lower as expected, taking out rising channel to challenge an upward-sloping trend line set from the April 16 low (now at 1380.59). A break below that initially eyes the 38.2% Fibonacci expansion at 1366.43. Channel support-turned-resistance is at 1403.26, with a move above that exposing the 50% Fib expansion at 1413.03.
Daily Chart – Created Using FXCM Marketscope 2.0
CRUDE OIL TECHNICAL ANALYSIS– Prices broke above resistance at 95.71, the 38.2% Fibonacci expansion, exposing the 96.72-97.09 area marked by the 50% level and a falling trend line established from mid-September 2012. A break above that targets the 61.8% Fib at 98.47. The 95.71 level has been recast as near-term support, with a move back beneath that eyeing the 23.6% expansion at 94.00.
Daily Chart – Created Using FXCM Marketscope 2.0
— Written by Ilya Spivak, Currency Strategist for Dailyfx.com
To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak
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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
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You can follow Paul on Twitter at@PaulRobinonFX.
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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
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