Analys från DailyFX

USD/CAD Technical Analysis: Catapulting Higher On BoC & Yield Differential

Published

8 år ago

1 mars, 2017

DailyFX

Talking Points:

USD/CAD Technical Strategy: Pull off 1.30/31 favors choppy move higher
BoC statement more dovish than expected after playing down higher inflation
Previous Article: USD/CAD Technical Analysis: Time Correction Heading Into BoC
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The Canadian Dollar is opening the month as the weakest currency in G8FX when compared against 28 pairs on a 4-hour chart with a 200-period moving average applied. Consequently, the USD has moved up the ranks aggressively in the last week as pricing in of a Federal Reserve Rate hike later this month has surged from a ~33% probability a week ago, to over 85% on Wednesday.

The Bank of Canada seemed to provide fuel for USD/CAD bulls with the statement that core inflation measures “continue to point to material excess capacity in the economy.” The statement combined with USD strength to stretch the 2-year differentials to their widest in 3-months. Betting against a pair that is showing the steepest yield differential in a quarter is a bet against momentum, which can be painful when wrong.

Sticking to the tenet of not fighting strength, nor buying weakness, we’ll look for the topside to continue in USD/CAD even if USD shows some exhaustion after the strong run higher at the start of the week. Many traders are keeping an eye on the 1.3350/80 zone as a price level to watch. A close above this zone could mean that we’re soon to move to the top half of the channel toward 1.36/38. The additional Fundamental risk for the pair is Canadian GDP on Thursday followed by key Fed speaker’s Yellen VP Fischer on Friday.

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The chart below shows a channel drawn off the two key low prices on the corrective move that began in May and copying the line to the first high in late May. Given the Canadian Dollar’s status as the weakest G8 currency, it’s hard to favor a move below support, but we’ll continue to watch the Trendline that is drawn by connecting the May low with the late-January low of 1.2986.

Wednesday’s price action has also taken USD/CAD above the Ichimoku Cloud on the Daily Chart. The sharp move higher this week could see a late-week pull-back, but a move higher beyond 1.3400 should convince traders that the weak CAD could soon become weaker without threats of a Hawkish BoC or Oil market breakout.

What Did The Analysts Learn After Trading Of All 2016? Click Here To Find Out

D1 USD/CAD Chart: Trading Post-BoC Favors Choppy Move Higher Into Multi-Month Channel

Chart Created by Tyler Yell, CMT

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Shorter-Term USD/CAD Technical Levels for Wednesday, March 1, 2017

USD/CAD Technical Analysis: Catapulting Higher On BoC amp; Yield Differential

For those interested in shorter-term levels of focus than the ones above, these levels signal important potential pivot levels over the next 48-hours of trading.

T.Y.

Analys från DailyFX

EURUSD Weekly Technical Analysis: New Month, More Weakness

Published

8 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

8 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

8 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