Analys från DailyFX

USD/CAD Technical Analysis: CAD Bulls Face Critical 100-DMA (Levels)

Published

8 år ago

10 februari, 2016

DailyFX

Interested In our Analyst’s Longer-Term Oil Outlook, be sure to sign up for our free oil guide here.

Talking Points:

USD/CAD Technical Strategy: Stretched Downside Brings Risk: Reward Favor to Bulls
CAD Has Broken Through To 2016 Lows, Will BoC Stay Complacent?
Oil Direction Increasingly Volatile As Trader’s Question if Jan. 20 Was Low

Why USD/CAD Direction Is Uncertain?

The Canadian Dollar has been a volatile currency across the board. Now, USD/CAD implied volatility over 1-month has reached the highest levels since November 2011. This expected volatility means uncertainty is high even with Oil breaking below the January 20 lows.

Now the focus turns to what is driving the Canadian Dollar across the board as well as against the US Dollar. The US Dollar has been hard hit, and the ~ 1,000-pip fall in USD/CAD could turn the attention of the Bank of Canada back toward potential easing policy. Such a move would likely be due to a stronger relative Canadian Dollar, which hurts exports; alongside weak Oil that continues to put pressure on the energy portion of the economy will likely pressure economic growth.

Now that USD/CAD has recently taken out the 2016 opening range lows, there is a view that more downside could be on the way. However, you can see on the chart above that we have entered a key range of support going back to May. Until support, which aligns nicely with the 100-dma has broken, it is hard to see selling USD/CAD as a high probability trade.

To see how FXCM traders are positioned after such a big move, click here.

Key Levels after the Plunge

Considering that, USD/CAD sits in the middle of a wide long-term range between 1.3600-1.4325, the next zone of resistance of 1.4101 remains in focus. An inability to take out that opening range high of February would turn attention back to the bottom of the range with the February 5 low at 1.3710 and the Feb 4 low at 1.3638 of keen interest.

If USD/CAD is not supported by the 100-DMA at 1.3568, a broader view of US Dollar downside would be favored. However, returning to the first level of focus higher at 1.4101, if that level is taken out the next levels of resistance is the 21-DMA at 1.4139 followed by the late January corrective high of 1.4324.

Canadian Dollar Rally is set to Last per Sentiment

When looking at sentiment, crowd sentiment has moved back to a bearish bias relative to recent positioning. We use our Speculative Sentiment Index as a contrarian indicator to price action, and the fact that the majority of traders are selling again provides a contrarian signal that the USDCAD may continue higher. A push further into negative ratio territory on client positioning would favor further upside towards resistance mentioned above.

Combining the technical picture above, with the sentiment picture, a hold of support would further support the bullish argument. However, a break below support of the long-term channel and 100-DMA alongside a flip in retail sentiment from net short against the trend to net long against a potential new trend would further warn of more CAD gains ahead.

USD/CAD Speculative Sentiment Index as of 2/10/2016

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T.Y.

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

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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

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

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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