Analys från DailyFX

USD/CAD Technical Analysis: CAD Bulls Likely In Charge below 1.4325 (Levels)

Published

8 år ago

2 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: Break through 1.4325 Would Encourage CAD Buying
CAD Has Moved To Strongest Currency in G10, Was Weakest 2 Weeks Ago
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 currently sits 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 alongside WTI Crude Oil. Now, CAD has been rallying after reversing its longest losing streak since 1971, and traders are understandably wondering if more CAD strength is ahead.

Market forces will continue to drive USDCAD in the short-term, but traders should remain cognizant of the Friday’s job report that could affect risk-appetite and overt focus on Oil’s next move. However, the ‘Blame it on Crude’ environment seems to be fading for now.

For one, the lack of dovishness from the BoC to cut rates further has lessened the spread between the US/CA 2 years Government yield spread, which widened as the price of USD/CAD moved higher. Second, markets have been re-adjusting to the risk-reversal since the January 20 low in multiple markets (stocks, commodities, and many currencies), which seems to align CAD with risk sentiment as well. Therefore, if risk-off resumes and equities drop, USDCAD could start breaking higher, however, the CAD bears may have started hibernating now that the BoC is not in a hurry to cut rates.

Key Levels after the Plunge

The focal point on the chart now is a bracket. First, given the sharp ~750+ pip reversal, support looks to be at the 2016 YTD low at 1.3811 and the 3-month channel support/ trendline off the lows, as well as the 55-DMA 50% retracement of the October-January range near 1.3760/1.3830. A strong turn off these levels higher should turn attention back to the upper-half of the channel, which would favor a move back above 1.4500.

Resistance now looks to be at the lower high of 1.4325 where CAD Bulls recent reclaimed their bragging rights. A break back above 1.4325 would open up the view that the channel is holding, and price may likely resume higher. In addition, while the relationship has broken down a bit recently, a sustained move lower in WTI Crude Oil below $30bbl again would also turn the focus toward medium-term resistance on USD/CAD.

Sentiment Beginning to Favor CAD Bulls

When looking at sentiment, Crowd Sentiment Extremes Have Plummeted on USD/CAD relative to recent positioning, which shows that traders do not think USD/CAD is as overbought as they once did. On the sentiment chart below, you will also notice that there are the fewest number of USD/CAD bears since early December. We use our SSI as a contrarian indicator to price action, and the fact that the majority of traders are short still gives a signal that the USDCAD may continue higher. However, a flip into positive territory would warn of a larger trend shift.

Combining the technical picture above, with the sentiment picture, a break below key support of the YTD low of 1.3811, 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. Ironically, such an event might wake up both Poloz the CAD bears.

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

Interested In Learning the Traits of FXCM’s Successful Traders? If So, Click Here

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

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