The Euro broke support guiding prices higher over the past month, hinting the down trend started against the US Dollar in September may be resuming. The single currency succumbed to broad-based selling pressure amid disappointment in the unraveling of an almost-there Brexit accord. From here, a daily close below the Alternatively, a move back above the A stop-loss will be activated on a daily close above 1.
Half of profit will be booked and stop moved to breakeven when and if the first objective is met. JPY strength i n a broader sense continues to be a source of confusion. One argument as to the persistent bid of the JPY is the view that the Bank of Japan may soon turn a shade m ore hawkish relative to prior BoJ rhetoric.
Looking to other markets to explain the JPY , it is hard to argue that the markets are moving toward a risk-off environment where JPY is often in demand. In addition to stocks near or at record-highs with little stopping them, US Treasury yields continue to stay near the top of recent ranges after US data continues to surprise and impress while other inflationary indicators like commodities also show demand pressure pushing up prices.
Until a break below the Ichimoku cloud base and The confirmation price of a bullish breakout would occur near the November 22 high and the DMA at The sentiment highlight section is designed to help you see how DailyFX utilizes the insights derived from IG Client Sentiment , and how client positioning can lead to trade ideas.
If you have any questions on this indicator, you are welcome to reach out to the author of this article with questions at tyell dailyfx. Retail trader data shows The number of traders net-long is 2. We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests USDJPY prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger USDJPY-bearish contrarian trading bias emphasis added.
Click here for full access. In our last article, we looked at a congested British Pound as Cable continued in a direction-less manner near-term. This level had previously functioned as resistance, and this opened the possibility of a relatively tight stop lodged above the 1. That resistance showed-up on Friday, and after an early swoon to start the week, prices have moved right back towards this area.
Chart prepared by James Stanley. That trend is in question, however, as the projection of this trend-line has been seeing considerable intra-day oscillation over the past couple of weeks. This trend-line first re-engaged on the heels of the BoE rate hike; and in some form or another, buyers have continue to offer some element of support around this level. This is not the only element of support around current levels, however, and this is where the backdrop on the pair gets a bit more complicated.
Within the past month worth of sloppy chop, we have a number of support and resistance levels, further hindering any indications of trend that may have shown up. For traders looking to assign a directional approach, we continue to look for breaks of longer-term support or resistance before assigning a trend-side bias. The drivers around Brexit still exist, and this could continue to stoke volatility in the pair.
Traders should be careful of executing shorts off of 1. While that resistance played rather cleanly, a revisit around the same level just a few trading days later could be setting up a trap for bears, and if we do see the U.
Contact and follow James on Twitter: Swissy is trading higher on the day after breaking out to fresh four-month highs last week. In our last article , we looked at the level of. Perhaps more importantly than any theoretical prognostications is the fact that this level functioned as resistance on multiple occasions over the past four months, rebuking upward advances in both June and August.
This denotes the prospect of further bullish continuation, and a top-side breech of that level opens the door for bullish strategies targeting a re-test of parity which, perhaps coincidentally, is 11 pips away from the This can open the door to a couple of different plays in the pair.
Rather, traders can look for support to show-up at that area of prior resistance, around. Alternatively, if a higher-low support test does not show up, traders can look for the next area of resistance to come in around the parity figure. The Australian Dollar corrected higher against its US namesake as expected but the down trend started in early September may now be resuming. Prices were rejected on a retest of former range support and slipped back below a rising trend line set from December , hinting that recent gains were corrective.
From here, a daily close below the 0. Alternatively, a break above support-turned-resistance at 0. A stop-loss will be triggered on a daily close above 0.
Profit on half of the trade will be booked and the stop moved to breakeven on hitting the first objective. CAD initially surged after data showed Canada added 79, jobs last month US employment data will be next Friday , which was the largest gain in 5 years while smashing expectations. The employment data in Canada also showed the lowest unemployment rate in a decade.
Mere hours after the good Canadian economic data hit the headlines, the dollar dropped nearly across the board. The catalyst was breaking news that a Russian Probe in the US surrounding a former US Presidential cabinet member, Michael Flynn has admitted to lying to federal agents regarding his involvement with Russia leading up to the US Presidential election.
The one-two punch gave the Canadian Dollar its largest gain since September 6, and the third largest gain for Traders keen on looking to options should note that the long-term case has not changed much. While short-term bets on further CAD weakness declined, the options market of risk reversals showed that the 1-year structure is still betting on further CAD weakness against the USD.
Short-term support on the chart will be 1. Should the bullish case resume, the next target would be the DMA at 1. Unlock our Q4 forecast to learn what will drive trends for the US Dollar through year-end! The number of traders net-long is We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USDCAD 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 USDCAD price trend may soon reverse lower despite the fact traders remain net-short emphasis added.
The dominant New Zealand Dollar trend continues to favor the downside against its US counterpart despite an apparent deceleration in the pace of decline.
The steeper down move from the late September swing high seems to have ended but a shallower series of lower highs and lows remains in play. From here, a daily close below the November 17 low at 0. Alternatively, a push above 0. If triggered, the trade will initially target 0.
The Euro broke support guiding it higher against the British Pound through November, hinting the dominant down trend may be resuming. Prices have been locked in a choppy range since late September but a break of rising trend support after a test of the post-Brexit vote high hints the overall bias favors the downside.
Near-term support is at 0. Alternatively, a move back above the November 21 low at 0. The top-side is clearer, but resistance on the under-side of a key trend-line can keep the door opened on the short-side, as well.
That has not happened. This rate decision also brought with it the pronouncement that the ECB expects to keep rates at or near present levels well into the future; inferred to mean beyond This zone that runs from But after ECB in maroon on the below chart , those lows began to slip a bit-lower, giving the appearance that support was about to breach as sellers took over.
This case was even strengthened by the lower-high that showed up around As we came into this week, a couple of positive European data prints have helped to re-invigorate Euro bulls. German GDP came-in red hot at. This puts Europe on pace to grow faster than the United States, and while the Fed has invoked four rate hikes over the past two years, the ECB remains pedal-to-the-floor on the stimulus front, with no signs yet of abating.
This is the A third approach here becomes interesting for top-side breakouts above the double top. Also of interest on the bullish side is near-term potential support. Prices have moved off of short-term highs, and currently appear to be trying to dig-out support around the prior swing around If we do see a bullish response, as indicated by a candlestick wick on the four-hour chart, this can open the door to top-side setups looking for a re-test of An aggressively bullish trend-line can be found by connecting the August low to the October 15 th low.
The projection of this trend-line coincides with that prior swing-high around The fact that prices have put in a rather strong reaction thus far makes this an interesting observation, and if we do see prices fall back towards that prior zone of support around This set of levels has been added to the below chart in red. Current Resistance Assisted by While support showing around prior resistance of The British Pound was rather weak after that recent rate hike, largely on the basis of the dovish stance at the Bank of England.
And those previous trends of aggressive Yen weakness appears to have calmed, at least for now. What could change that is an incline over the At that point, Alternatively, a break-below the October low of Should USD-strength continue, a bullish move over this resistance level can open the door to breakout strategies in Swissy.
Dollar has had a rather rough After coming into the year trading above the 1. But after running into support in mid-July around the. Resistance has begun to build around the. At this point, a top-side break of that well-worn resistance level could open the door to an attractive bullish breakout setup.More...