Analys från DailyFX

USD/CAD Technical Analysis: CAD Bulls Face Key Test at Fib & Channel Support (Levels)

Published

8 år ago

4 februari, 2016

DailyFX

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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

The Story in USDCAD – Is the CAD Drop Done?

The Canadian Dollar remains well atop a strength index of G10 Currencies in a sudden two-week shift of fortunes in the FX market. Two weeks ago, the Canadian Dollar was falling through the floor of chart price support, while everyone was in awe of US Dollar Strength. How quickly the fortunes can change in FX.

Now, CAD has been rallying after reversing its longest losing streak since 1971, and traders are understandably wondering if more CAD strength is ahead. USD/CAD has taken out the 2016 Opening Range low, which is a good sign that the high set on January 20 may be the high price for the year or at least for the next few months. However, this type of second-month reversal has been common for USDCAD in the last few years.

While market forces and unwinds will continue to drive USDCAD in the short-term, traders should remain aware of the Friday’s job report in America and Canada that could affect risk-appetite and divert focus on short-term risk sentiment. However, the ‘Blame it on Crude’ environment seems to be fading for now.

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

Key Levels after the Plunge

The focal point on the chart now is long-term trendline and Fibonacci support. First, given the sharp ~1100 pip reversal, support looks to be at the price zone of 1.3550/3650. A strong turn off these levels higher should turn attention back to the opening range low of 2016 that sits at 1.3811. Beyond Opening Range low as resistance, the weekly pivot point and price high would be worth focusing on at 1.4101.

Either way, you look at the chart; the burden of proof is on the USD/CAD Bulls. A break above the resistance levels mentioned would be the first signs of evidence that they have a rightful claim. However, unwinds often defy expectations, and if price breaks through key support of the 1.3550/3650 zone, we may have entered a longer-term sell the rally environment.

Canadian Dollar Rally is set to Last per Sentiment

When looking at sentiment, Crowd Sentiment Extremes Have Flipped on USD/CAD relative to recent positioning, which shows that retail traders likely now see USD/CAD as oversold. On the sentiment chart below, you will also notice that there has been a changing of guards as to the number of USD/CAD buyers. We use our Speculative Sentiment Index as a contrarian indicator to price action, and the fact that the majority of traders are now long provides a contrarian signal that the USDCAD may continue lower. However, a flip into negative territory again would warn of a larger trend resumption higher.

Combining the technical picture above, with the sentiment picture, a break below newly defined support of the long-term channel and Fibonacci support, 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 2/4/2016

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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