Analys från DailyFX
USD/CHF Technical Analysis: USD/CHF Still Supported, Direction Remains Unclear
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Talking Points:
- USD/CHF Technical Strategy: Flat
- USD/CHF has continued to congest after failing to break through Fibonacci support at .9681.
- As Swissie continues to trade within this symmetrical wedge formation, direction remains unclear until more concerted price action is shown.
USD/CHF has had one of the more interesting support/resistance inflections this week, as we’ve now seen four consecutive days of support at a key Fibonacci level of .9681. This is the 50% retracement of the ‘big picture move,’ taking the 2008 high to the 2011 low before the Swiss National Bank instituted the peg in the currency to the Euro. The symmetrical wedge connecting the highs of March to the highs of August, and the lows of May to the ‘panic low’ on August 24th continues to define price action in the USD/CHF, and until this wedge is broken by either higher or lower prices, direction remains unclear and the trend remains cloudy.
Should the resistance trend-line clear first, which as of tomorrow would be in the .9840 vicinity, long positions become attractive with targets towards .9900 (price action high and psychological resistance), parity at 1.0000 (‘major psychological level’), and then 1.0239 (the 2015 high). Directly above that is the 61.8% retracement of the same ‘big picture move’ mentioned at the open of this article, and that’s just shy of the 1.0300 psychological level at 1.0298.
Alternatively, the short side could be entertained with breaks and then intra-day resistance at the same .9681 price that’s offered such rigid support. Should .9681 break, traders can wait for resistance to show in the vicinity of old support, with targets at .9550 (higher-low price action support), .9500 (confluent zone of support with the 61.8% retracement of the most recent major move plus being a ‘major psychological level’), and then .9270 (50% retracement of most recent major move).
Written by James Stanley of DailyFX; you can join his distribution list with this link, and you can converse with him over Twitter @JStanleyFX.
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
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You can follow Paul on Twitter at@PaulRobinonFX.
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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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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
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