Analys från DailyFX
Weekly Price & Time: Bigger USD Move Ahead?
This publication attempts to further explore the concept that mass movements of human psychology, as represented by the financial markets, are subject to the mathematical laws of nature and through the use of various geometric, arithmetic, statistical and cyclical techniques a better understanding of markets and their corresponding movements can be achieved.
Foreign Exchange Price Time at a Glance:
EUR/USD Weekly:
Charts Created using Marketscope – Prepared by Kristian Kerr
–EUR/USD closed at its lowest level in a month and below the 2nd square root progression of last month’s high in the 1.3020 area
–A top of some sort now looks to be in place on the weekly that suggests the broader downtrend in place since February is likely to try to re-assert
-Focus over the next week will be on the 3rd square root progression of the April high near 1.2900 with weakness below this level needed to confirm the integrity of the current decline
-Medium-term time cycle studies now look negative on the rate for at least several more weeks if not longer
-Only strength above the 4th square root progression of the year-to-date high at 1.3245 would turn us positive on the Euro
Strategy: We like tactical short positions in the Euro against 1.3245
USD/JPY Weekly:
Charts Created using Marketscope – Prepared by Kristian Kerr
–USD/JPY finally overcame the 100 psychological barrier this week and traded to its highest level since October of 2008
-Our weekly bias is higher in the exchange rate with focus on a square root progression related to the March low in the 102.45 area
-Weekly close above the two key time cycle turn dates recorded last month favors general strength in the rate for several more weeks
-The 50% retracement of the 2007 to 2011 decline in the 99.80 area is now key support
-Only a weekly close below this level undermines the positive medium-term technical structure in the rate
Strategy: We like holding tactical long positions in USD/JPY whilst above 99.80.
GBP/USD Weekly:
Charts Created using Marketscope – Prepared by Kristian Kerr
–GBP/USD failed again this week to surpass the 50% retracement of the year-to-date range in the 1.5585 area
–Subsequent weakness from this level to test the 2nd square root progression of last week’s high in the 1.5325 area has us looking for a broader downside resumption
-A close below this level in the next week or two is needed to confirm this suspected change in medium-term trend
-A longer-term Gann related time cycle turn window is in effect which further favors a trend shift here
-The 1.5585 level remains key resistance and only a weekly close over this level turns us positive on Cable.
Strategy: Tactical short positions favored in Cable whilst below 1.5585.
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To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter @KKerrFX
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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.
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
To be added to Christopher’s e-mail distribution list, please fill out this form
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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