Analys från DailyFX

USD/CHF Technical Analysis: Pin Bar at Range Resistance

Published

9 år ago

31 oktober, 2016

DailyFX

To receive James Stanley’s Analysis directly via email, please sign up here.

Talking Points:

USD/CHF Technical Strategy: Longer-term range, short-term price action breaking-lower.
Price action finally ran into the vaulted resistance zone between .9949-1.0000; and this can open the door for short Swissy positions with the aim of trading the range.
An analyst pick is active after being issued on Thursday of last week based on the setup we’ve been discussing: Short Swissy at Market.
If you’re looking for trading ideas, check out our Trading Guides.

In our last article, we looked at the five- month range building in USD/CHF. Of particular interest with that range-formation was a zone of resistance around .9949, which is the 61.8% Fibonacci retracement of the 2010/2011 major move. This level had given two strong resistance inflections during the prior five months of this range’s life, and a subsequent inflection could open the door for a ‘triple top’ formation.

Last week, price action burst up to this level of resistance, continuing to run-higher and towards the widely-watched parity figure in the pair. Price action was met with resistance just shy of 1.0000-even, as sellers came in to aggressively push prices lower. This left last Tuesday’s daily candlestick in USD/CHF showing as a ‘pin bar’ formation; short for ‘Pinocchio bar,’ which is an extended wick (that’s at least the size of the candlestick’s body) that ‘sticks out’ from recent price action. Pin bars can be fantastic reversal formations as they indicate a quick breach of resistance that was soundly met with sellers. This also had the luxury of clearing out stops of prior short positions in the market that might’ve been wedged above that very obvious level of resistance at .9949. Stops on short positions, of course, are orders to buy, and this buying pressure from stops being triggered could’ve easily helped to further volley price action higher beyond .9949. This is why traders will often hear of ‘blow off’ moves, in which a quick break of resistance becomes a bit more extended, as sitting stop orders (to buy) get triggered, bringing even more buying demand into the market, albeit temporarily, as those stops get cleared out.

Since that test of prior resistance last week, price action in USD/CHF has been angling lower, and a quick break of short-term support on Friday of last week may be opening the door for ignition of the bearish swing.

Traders can investigate bearish positions in USD/CHF with the goal of filling in the other side of the range. Traders looking to treat the move aggressively would likely want to look at stops above the prior zone of resistance at the .9950-marker. This can open the door for profit targets and a break-even stop move with support at the .9821 level, after which targets at .9750 and then .9682 could become attractive.

For traders looking to treat the move more conservatively, stops above the parity figure can be investigated. The downside of this wider stop is that support at .9821 would be less than a 1-to-1 risk-reward ratio, so traders using the more conservative stop would likely want to look at initial targets a bit deeper, perhaps as low as .9750 as this could offer an approximate 1-to1.45 risk-to-reward ratio.

Chart prepared by James Stanley

— Written by James Stanley, Analyst for DailyFX.com

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Contact and follow James on Twitter: @JStanleyFX

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

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

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

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

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