Analys från DailyFX
Weekly Price & Time: Euro Challenging a Key Support Zone
EUR/USD is challenging a key support level at month-end while Gold pauses after reaching its highest level since mid-May. USD/JPY remains in consolidation mode. .
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Weekly Price Time Analysis: EUR/USD
Charts Created using Marketscope – Prepared by Kristian Kerr
- EUR/USD failed last week to close above the 1.3415 2Q13 high on a weekly basis
- While below this level our broader trend bias will remain lower
- The 2nd square root progression of the year-to-date high at 1.3220 is key support and a weekly close below this level is needed to signal a downside trend resumption
- A long-term cycle turn window is in effect for a few days
- A weekly close over 1.3415 will confirm a trend reversal and open the way for a much more important move higher in the weeks ahead
Tactical EUR/USD Strategy: Still short against a weekly close over 1.3415.
Weekly Price Time Analysis: USD/JPY
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/JPY has been unable to gain any real traction over the 5th square root progression of this year’s high in the 98.60 area
- While over the 2Q13 low near .9375 our longer-term trend bias will remain higher in the rate
- A close over 98.60 and then 99.65 on a weekly basis is needed to confirm that an upside resumption of the broader trend is indeed underway
- The next few days are a turn window in the rate
- The 97.50 retracement confluence remains intermediate support, but only aggressive weakness below the 2Q13 low on a multi-day closing basis would turn the broader outlook negative
Tactical USD/JPY Strategy: Tactical longs favored against .9375.
Weekly Price Time Analysis: Gold
Charts Created using Marketscope – Prepared by Kristian Kerr
- XAU/USD traded to its highest level since mid-May before finding resistance on a closing basis at the 7th square root progression of the year-to-date low at 1419
- While abvoe the 3rd square root progression of the year-to-date low in the 1280 area our broader trend bias is positive on the metal
- A weekly close over 1419 and then the 100% projection of the July advance at 1441 is needed to trigger the next leg higher in the metal
- A medium-term turn window was seen around the middle of the week
- The 4th square root progression of the year’s low near 1350 is important support, but only aggressive weakness below 1280 would turn the broader technical outlook negative
Tactical Gold Strategy: We like tactical long positions in Gold while above 1280.
— Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com
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.
Looking for a way to pinpoint sentiment extremes in Gold in real time? Try the Speculative Sentiment Index.
To contact Kristian, e-mail kkerr@fxcm.com. Follow me on Twitter @KKerrFX
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.
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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