Analys från DailyFX

USD/JPY Technical Analysis: How Trump Pumped USD/JPY Above 105

Published

9 år ago

9 november, 2016

DailyFX

Talking Points:

USD/JPY Technical Strategy: Another Volatile Rejection Near 101 Favors More Upside
Inflation Expectations Aggressively Higher Favoring USD/JPY Follows Suit
Gold Reversal Shows Dumping Of Haven Assets
MOF statements on “rough” FX moves indicate intervention being discussed

The U.S. 10-Year Treasury Curve has traded above 2% for the first time since January and U.S. Yields tend to be positively correlated to the price of USD/JPY. As the realization of a Trump Victory developed, JPY and Gold went bid after the MXN sold-off. However, a lot of that move has been reversed and could have been triggered on short-term options that were at record levels ahead of the election.

The Trump Rally that USD/JPY has been leading looks to have multiple support points. First, we head overnight as the JPY was strengthening that the Minister of Finance in Japan publicly stated the “rough” moves were being watched could indicate there was also some intervention.

Another key component is the one-day bear market in the VIX, which is supportive of risk-on. The VIX is lower on the day by nearly ~20% with a greater than 30% range. A strong drop in the VIX shows traders are more confident in stable-gains on the CBOE SPX contracts.

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The risk-off move unfolding will continue to keep an eye on the yields as we mentioned above, and the inflation expectations on the potential new policies by Donald Trump. The day’s range of ~430 pips shows a lot of hesitancy to hold a JPY long trade as the Yield Curve steepens in the U.S. as well as Gold reversing prior gains.

D1 USD/JPY Chart: Trump Rally May Be Led By USD/JPY As It Rises 105

Chart Created by Tyler Yell, CMT, Courtesy of TradingView

USD/JPY has tested and aggressively pushed off of the 99/101 zone multiple times since the Brexit vote was confirmed on June 24. We’re now at the top of the range that sits at ~105. The next key level above today’s high 105.45 is the 200-DMA at 106.63 and the post-Brexit July high at 107.49.

Further pressure on these levels would likely be met with a rushin or fear of missing out a trade that could keep USD/JPY bid. Two indicators that have been helpful in addition to the zone of support of 99/101 is the Ichimoku Cloud and the Andrew’s Pitchfork channel tool.

The Ichimoku Cloud continues to support the price on a closing basis despite the sharp initial sell-off on Wednesday Morning of trading. Should the price continue to close above the Ichimoku Cloud, there is little reason to fight the potential for a strong base developing.

Lastly, the Andrew’s Pitchfork Channel drawn off the extreme close on August 16 that registered an extreme for RSI(5) and pivots in September keeps focus higher. For now, Wednesday’s sharp move lower is being treated as part a bottoming process. This view would be validated on a break above the resistance levels mentioned above at 106.63/107.49.

Shorter-Term USD/JPY Technical Levels: November 9, 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.

USD/JPY Technical Analysis: How Trump Pumped USD/JPY Above 105

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