Analys från DailyFX

USDCAD Options Point to Low Volatility, Projected Low in Confluence with Support

Published

7 år ago

23 augusti, 2017

DailyFX

What’s inside:

USDCAD one-week implied volatility at 7%, projects 1 STDEV range of 12446-12690
Top-side looks unlikely to be exceeded with trend favoring more selling
Confluence of projected low and July low; risk highest for IV to rise on a breakdown

Looking for a longer-term view on USDCAD? Check out our Q3 Forecast.

In the following table, we’ve listed implied volatility (IV) for major USD-pairs for the next one-day and one-week time periods. Using IV, the projected range-low/high prices from the current spot price within one-standard deviation have been calculated for specified periods. (Statistically speaking, there is a 68% probability that price will remain within the lower and upper-bounds.)

USDCAD one-week implied volatility a subdued 7%, suggests a small range with the projected 1 STDEV low in confluence with key support

One-week implied volatility in USDCAD at a level of 7% suggests a one-standard deviation range of 12446 to 12690 over the next five trading sessions. It’s a fairly small range, and one which could certainly be exceeded. But when looking at where key price levels align in proximity to these projected levels implied volatility may turn out to be priced right.

Looking higher we have minor trend-line resistance which arrives just below the projected one-week high of 12690. The overall trend suggests a push higher may require more fire-power than what is currently available in the absence of a significant catalyst (No strong CAD data next few days, Yellen at Jackson Hole on Friday will be the primary focus). On that note, seeing the 1 STDEV high exceeded doesn’t look highly likely.

Turning the focus lower, there is pretty good support around the one-week projected low at 12446. This level aligns well with the low created at the end of July. It was a volatile low which saw several days of lows ticked within about 20 pips of one another. On a first attempt to push lower from here we may see USDCAD find some life at key support, even if it is to eventually break lower. But giving the trend the benefit of the doubt, should we see a decline accelerate as it approaches the July low then risk is the market isn’t pricing in enough downside risk. The next support level to keep an eye on if the July low at 12413 breaks, is the 2012 trend-line arriving about 60-70 pips lower.

All-in-all, implied volatility looks to be priced about right, with the highest risk of a breakout coming on the downside with a breach of the July low.

For other currency volatility-related articles, please visit the Binaries page.

USDCAD: Daily

See the Webinar Calendar for a schedule of upcoming live events with DailyFX analysts.

—Written by Paul Robinson, Market Analyst

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

You can follow Paul on Twitter at @PaulRobinonFX.

Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

Published

7 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

Confidence is essential to successful trading, see this new guide – ’Building Confidence in Trading’.

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

7 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

To be added to Christopher’s e-mail distribution list, please fill out this form

Analys från DailyFX

British Pound Reversal Potential Persists Heading into New Quarter

Published

7 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