Analys från DailyFX
Weekly Price & Time: Euro Nearing a Critical Level
EUR/USD is nearing a major inflection point in price. USD/JPY broke a key support this week, but has some room before turning longer-term negative. Gold still languishing below 1350.
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Weekly Price Time Analysis: EUR/USD
Charts Created using Marketscope – Prepared by Kristian Kerr
- EUR/USD overcame a myriad of resistance in the 1.3300 area to trade to its highest levels since mid-June this week
- Our medium-term trend bias remains lower in the Euro, but traction over the 1.3415 2Q13 high on a weekly closing basis will shift higher
- Last week’s high near 1.3340 is interim support, but weakness below the 4th square root progression of the year’s low at 1.3185 is really needed to reinvigorate the downside prospects
- The second half of the month looks like the next turn window of importance for the single currency
- The 1.3415 2Q13 high is very significant from a Gann perspective and a weekly close over this level will alter the broader negative picture in place since June
Tactical EUR/USD Strategy: Short against a weekly close above 1.3415.
Weekly Price Time Analysis: USD/JPY
Charts Created using Marketscope – Prepared by Kristian Kerr
- USD/JPY broke below a key Gann/Fibonacci confluence around 97.60 this week to trade to its lowest level in 7-weeks
- While over the 2Q13 low near .9375 our longer-term trend bias will remain higher in the exchange rate
- The 97.60 area is now resistance and traction over this zone is needed to signal a a broader upside resumption
- The second half of the month now looks like the next cycle turn window of importance
- The 78.6% retracement near 95.50 important support and weakness below is likely to lead to a test of .9375 below which would turn us negative on USD/JPY
Tactical USD/JPY Strategy: Tactical longs still favored against .9375.
Weekly Price Time Analysis: Gold
Charts Created using Marketscope – Prepared by Kristian Kerr
- XAU/USD has come under fairly steady pressure since failing near important Fibonacci symmetry in the 1350 area at the end of July
- While below this level our medium-term trend bias will remain lower in the metal
- The 4th square root progression of the July high near 1272 remains a key downside pivot with sustained weakness below this level needed to set off a more important decline
- An important week long cycle turn window is seen around the end of next week
- Strength over 1348 is needed to alter the negative cyclical picture and turn us positive on the metal.
Tactical Gold Strategy: We like tactical short positions in the metal while under 1348.
— 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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