Analys från DailyFX
US Dollar Stalls at Resistance, S&P 500 Challenges May Top
THE TAKEAWAY: An attempted recovery from the US Dollar has been cut short at technical resistance while the SP 500 has pushed higher to challenge the May swing high.
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US DOLLAR TECHNICAL ANALYSIS – Prices turned lower as expected, finding initial support at 10803 marked by the 38.2% Fibonacci retracement. A bullish Piercing Line candlestick pattern hints at the potential for renewed upside momentum. However, a Doji candle formed on a test of initial resistance at 10882 – the 23.6% level – points to indecision and injects a degree of doubt in bullish follow-through. Confirmation on a close above 10882 exposes the July 8 high at 11009. Alternatively, a reversal below support aims for the 50% Fib at 10739.
Daily Chart – Created Using FXCM Marketscope 2.0
SP 500 TECHNICAL ANALYSIS – Prices moved higher as expected after putting in a bullish Piercing Line candlestick pattern. A break above resistance at 1678.40, the 78.6% Fibonacci expansion, has now exposed the May 22 high at 1687.40. A further move above this barrier targets the 100% level at 1710.90. Alternatively, a reversal back below 1678.40 sees support at 1652.90, the 61.8% Fib.
Daily Chart – Created Using FXCM Marketscope 2.0
GOLD TECHNICAL ANALYSIS – Prices put in a Hanging Man candlestick below resistance at 1297.75, the 38.2% Fibonacci retracement, signaling indecision and warning that a pullback may be around the corner. Near-term support is at 1252.80, the 23.6% level, with a break beneath that eyeing swing lows at 1208.10 and 1180.15. Alternatively, a push above resistance exposes the 50% Fib at 1334.08.
Daily Chart – Created Using FXCM Marketscope 2.0
CRUDE OIL TECHNICAL ANALYSIS– Prices put in a bearish Dark Cloud Cover candlestick pattern, hinting a move lower is ahead. Near-term support is at 103.93, the 23.6% Fibonacci retracement, with a break beneath that targeting a rising trend line at 102.18 and the 50% level at 100.05. The bearish candle setup would be invalidated on a close above 107.41, the July 11 high.
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
To be added to Christopher’s e-mail distribution list, please fill out this form
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