Analys från DailyFX

USD/JPY Technical Analysis: Alignment With US Yields Favors Downside

Published

8 år ago

8 februari, 2017

DailyFX

Talking Points:

USD/JPY Technical Strategy: USD resumes 2017 downtrend, favoring more USD/JPY downside
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The strong correlation of USD/JPY and the US Note Yields is becoming a key story again. US 10yr yields are lower for the fourth straight day as of Wednesday afternoon for the first time since June. The spot price on Wednesdays afternoon is below 112, which turns focus on the November 28 and 23 low of 111.36 and 110.86 respectively. Some technicians are warning of a potential head and shoulders bearish reversal pattern on US 10Y Yields, which with the correlation coefficient of USD/JPY over the last 20-days at +0.70 should hold USD/JPY traders attention.

In addition to the USD/JPY alignment with UST 10Y Yields as seen in the chart below, hedge funds look to be cutting their JPY shorts, which could help guide USD/JPY lower. Per the CFTC data released last Friday on the CoT, Hedge Funds or Leveraged Funds reduced net JPY shorts by 13,995 contracts to 33,376. A continuation of the trend should add further downside pressure.

Overlay of USD/JPY (Red Line) on UST 10Y Yields With Potential Bearish Head Shoulders

We’ve long been on the watch for 109.92, which is the 50% retracement of the Post-Trump rally. As we sit without a change in the broad direction of the USD at the 38.2% retracement of the USD/JPY at 111.90, the 50% retracement appears to be an appropriate target as the DXY has had a difficult time gaining traction despite the earlier push this week off 112.

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The 50% retracement of the November 8 to the early-January range at 109.90 aligns with the bottom of the Daily Ichimoku cloud (not pictured). There remains a key missing component for the majority of traders who are trying to buy low in USD/JPY, and that is the momentum line on H4 Ichimoku. The lagging line is the close of the current candle pushed back 26-periods. A break above the cloud of the lagging line shows that momentum has flipped from its current bearish path.

We have also drawn the Andrew’s Pitchfork, which has been helpful, but not as helpful in my opinion as Ichimoku on an H4 chart waiting for the lagging line to break above the cloud before going long or following the trend lower.

H4 USD/JPY Chart: USD/JPY Resumes Lower In Counter-Trend Channel H4 Ichimoku Cloud

Chart Created by Tyler Yell, CMT

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Shorter-Term USD/JPY Technical Levels: February 8, 2017

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.

USD/JPY Technical Analysis: Alignment With US Yields Favors Downside

Contact and discuss markets with Tyler on Twitter: @ForexYell

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

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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