Analys från DailyFX

USD/JPY Technical Analysis: 3-Month Highs Turns Focus on 108

Published

9 år ago

26 oktober, 2016

DailyFX

Talking Points:

USD/JPY Technical Strategy: bullish break structural resistance (104.32) encouraging
Dollar Driving all markets as runaway move continues
JPY weakness is becoming a predominant theme as CNH also continues to depreciate

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USD/JPY price traded at 3-month highs on Tuesday morning as the Dollar showed strength across the board and most notably against the British Pound that fell to post-crash lows and USD/CHF almost hit parity. The strong move came as probabilities of a December rate hike by the FOMC for the December 14 Fed meeting rose to 73%.

Market participants look to be considering the view that a rate hike by the Fed would allow both the ECB and the Bank of Japan some breathing room to ease policy further or introduce new forms of easing fiscal policy. EUR JPY have fallen aggressively against the USD in October.

Another component worth watching that we’ve consistently pointed our readers toward is the rising yields (i.e. risk) on commercial paper and LIBOR. A handful of investment banks believe this could soon rise from current levels of 0.8867% that account for an upcoming hike to above 1.0000%. A move above 1.0000% would indicator either a more aggressive Fed than expected or tightening financial conditionals, either of which could support the US Dollar.

Given the similarities in currency focus, we have also discussed how the Chinese Yuan, USD/CNH continues to fall against USD. The drop continues to validate the trend of a stronger USD and weaker CNH. The weakening took the Yuan near record lows on the back of weak exports according to Bloomberg data.

The significance of the CNY move near a record low is what it may encourage Japan to do that would also weaken the JPY (i.e. yield curve control + fiscal stimulus), and therefore encourage an impressive set-up for a long USD/JPY trade (not a trade recommendation.)

H4 USD/JPY Chart: Possible Double Bottom Targeting 108

Chart Created by Tyler Yell, CMT, Courtesy of TradingView

The technical work on USD/JPY is compelling as we’ve broken above a key level at 104.32 and have recently traded at 3-month highs. A move higher in USD/JPY tends to go hand-in-hand with a well-functioning global economy and risk sentiment, which could be developing now as well.

Recently, we saw the Nasdaq 100 hit an intra-day record high, which is a leading indicator of growth stocks continue to go bid. The cross-market analysis seems to align with the investment flow that could keep USD/JPY.

On the chart above, we’ve looked at JPY breaking down as an indication that an Elliott Wave signal could be giving way to a move higher. While USD/JPY consolidates, we’ll continue to favor the upside if price holds above 102.70. The upside that we’re favoring is the double-bottom (mid-August late-September lows) that targets the 100% extension of the range at 108.557.

Another key indicator at the ~108 zone is the 200-WMA that sits at 108.18. This long-term moving average (~4-Years) has been very influential on USD/JPY direction since 2007.

Shorter-Term USD/JPY Technical Levels: October 25, 2016

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.

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