Analys från DailyFX

USDJPY Options Volatility Jumps on North Korea Threat, Yen Poised for Higher Prices

Published

7 år ago

29 augusti, 2017

DailyFX

What’s inside:

USDJPY one-week implied volatility rose overnight from near 7% to 8.64%
Path of least resistance suggests lower prices could lie ahead
One-standard deviation low and support from last year in confluence this time

Looking for a longer-term view on USDJPY? Check out our Q3 Forecast.

In the table below, we’ve listed levels of implied volatility (IV) for major USD-pairs for the next one-day and one-week time-frames. Using these levels, we’ve derived the range-low/high prices from the current spot price within one-standard deviation for specified periods. Statistically speaking, there is a 68% probability that price will remain within the lower and upper-bounds.

USDJPY implied volatility rises on North Korea threat, projected one-week range aligns with levels on both top and bottom-side, with a breakdown to be most probable way towards higher levels of IV

USDJPY is taking a hit with general risk-appetite on the back of North Korea firing a missile over Japan last night. One-week implied volatility has risen from just over 7% yesterday, to 8.64%, expanding the near-term range outlook. It points to a one-standard deviation range over the next week from spot price of 10726 to 10986. The low is of particular interest given the clear trend lower since USDJPY topped out on July 7, and increases the likely-hood we could see the lower threshold tested soon. There is support close at hand at 10813 (April low), but with volatility potentially to rise further we could see that level broken and lead to a peak set in July of last year. The 10749 high from over a year-ago and 10726 projected range-low are in close proximity. Risk is for that level to potentially fail should we see global equity markets and the ‘risk-trade’ as whole further weaken.

On the top-side, there is a trend-line running down off the July high and arrives well below the projected one-week high of 10986. If the pervasive downtrend is to maintain its integrity it is unlikely we will see USDJPY reverse back above the downward sloping resistance. If it does, though, the projected 10986 range-high may be difficult to exceed as there is solid price resistance right in the vicinity.

Overall, if volatility is to continue to rise it will come with further weakness in USDJPY. The lower projected level is at greater risk of breaking than the top-side given the current environment.

For other currency volatility-related articles please visit the Binaries page.

USDJPY: Daily

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—Written by Paul Robinson, Market Analyst

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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