Analys från DailyFX

WTI Crude Oil Price Forecast: Double-Bottom Pattern Favored Above $43.43

Published

10 år ago

1 december, 2015

DailyFX

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Talking Points:

Crude Oil Technical Strategy: Close 43.43 helps validate a base signals a base
13-DMA Holding Today’s Low So Far
RSI (5) Showing Bullish Divergence Into a Higher-Low

Oil looks to finish off its worst month of price performance since July by falling nearly 11%. The fundamental cause of this drop is due to doubt that OPEC will find the willingness from Non-OPEC producers to stop producing at such high levels. In a world where nobody wants to lose market share if the price of oil rebounds, there is no one willing to be the first to volunteer to cut production. This unwillingness could ironically send some producers over the edge and to the point of no return (read: bankruptcy) should their rigs fail or the price stay lower for longer such that the banks are not willing to refinance their current debt or provide adequate financing to meet production’s needs. As a ripple effect, we continue to hear stories of commodities based hedge funds closing down due to the rout in materials, metals, and oil. However, the idea that Oil could soon be bottoming is still lingering with credibility on the charts. The upcoming wildcard to all of this is the December 4th meeting where OPEC will make an announcement on production going forward with low prices where they are today.

After peaking out last week at $43.43bbl, the price has retreated but remains above the 13-DMA AT $41.68. If price can remain above the November low of $39.87, we will still hold out for a break above $43.43 to validate a breakout and the potential for a double-bottom price pattern. A double-bottom pattern is a reversal pattern that sees a second price failure within the price range of the first bounce. Given the August 24th range of $40.45bbl-$39.87 (red oval), we’ve currently met that requirement. What is currently missing is a breakout to the upside. The key level to validate the breakout is also the R1 Resistance level. Should any of the fundamental data bring out weakness in the US Dollar, which is inversely correlated to US Oil, we may soon turn our attention to the R2 Weekly pivot that currently sits higher near $45bbl. Also, FXCM’s trading book, used as a sentiment reading, is also showing that clients are now net-short, whch can, but not necessarily does precede higher prices are on the horizon. We use our SSI as a contrarian indicator to price action, and the fact that the majority of traders are selling gives a signal that US Oil may continue higher.

RSI continues to show us that a strong move higher could be underway, which is helpful because momentum can be seen as a leading indicator. Currently, the recovery of the mid-November lows have been mild, but the small victory is that recent dollar strength and macroeconomic announcement haven’t dragged the price lower. Given the interest in upside, a clear breakout could be aggressive. Any break below the mid-November low would immediately send focus lower towards the August 24th low, followed by the $35bbl region. T.Y.

We hope you enjoyed this short-term Oil Outlook, be sure to sign up for our free oil guide here.

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

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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