Connect with us

Forex

Buy Euro on a Dip? Fed & ECB Ahead

Published

on


EURUSD Technical Highlights:

  • EURUSD pullback could carve higher-low before another thrust higher
  • Support zone from 11730 down to 11660
  • Important risk events on Wednesday (FOMC) and Thursday (ECB)

For the intermediate-term fundamental and technical outlook on EUR/USD or any of your other favorite pairs or markets, check out the DailyFX Forecasts.

Heading into last week, we were looking for the euro to rally after posting a reversal at long-term support, which it did for most of the week until Friday. The move lower to end the week wasn’t damaging to a bullish outlook, and in fact viewed as a potential opportunity this coming week for would-be longs to buy the dip.

There is a key zone of support from around 11730 down to 11660, which EURUSD held on several occasions during the latter part of last year. The euro was able to recapture this once strong level of support last week and will be our first zone to watch for a higher-low to develop.

Should we see buyers step up in the aforementioned zone, we’ll be look for at least one more thrust higher towards the 11900/12000-area. A successful test could already be in the rear-view mirror as not only on Friday did the top of the zone hold, but the trend-line off last week’s low (most easily visible on the 4-hr chart) provided support as well.

Even if the trend-line and Friday low were to break, as long as the low-end of the zone holds, the euro will remain in play for a dip-trip. If an aggressive decline starts to unfold, though, the trend-line extending higher from January 2017 will again come into play, along with the weekly support from 2015/16.

It will be extremely important for those lower support levels to hold to keep the euro from quickly sinking much further. And even if a test and hold is successful at that point, the deeper retracement off the swing-high will take the wind out of the sails for the long-side until further repair can be done.

We should learn a lot as to how the market feels about the euro in the week ahead with the FOMC on Wednesday and, even more importantly, the ECB on Thursday. With higher-than-normal volatility expected next week traders will want to adjust risk parameters accordingly.

Even the best traders go through tough times. Check out these 4 ideas for building confidence.

EURUSD Daily Chart (Looking for dip to hold)

EURUSD daily chart with levels, pullback then higher?

EURUSD 4-hr Chart (May have already found support)

EURUSD 4-hr chart, first test of trend support off low

EURUSD Sentiment

For further indications as to which way the euro may be headed next, check out the IGCS Client Sentiment page. As a contrarian indicator, sharply increasing longs may add to a short bias, while rapidly increasing short positions will help bolster a case for longs.

Helpful Resources for Forex Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

—Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX



Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Forex

Bitcoin Net-Longs Slide Into 1-Month Lows

Published

on

By


Bitcoin Client Positioning

Bitcoin Net-Shorts 5.2% Higher Since Last Week

Bitcoin: Retail trader data shows 76.8% of traders are net-long with the ratio of traders long to short at 3.3 to 1. The number of traders net-long is 1.1% lower than yesterday and 8.0% lower from last week, while the number of traders net-short is 0.5% lower than yesterday and 5.2% higher from last week.

Be sure to check out our Bitcoin Trading Guide if you’re new to cryptocurrencies!

Bitcoin Net-Long Dip Indicate Bullish Bias

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Bitcoin prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current Bitcoin price trend may soon reverse higher despite the fact traders remain net-long.

— Written by Yayati Tanwar, DailyFX Research



Source link

Continue Reading

Forex

Canadian Dollar (CAD) Eyes Latest Inflation Report

Published

on

By


Canadian Dollar Price, News and Analysis

  • Inflation expected unchanged, but any uptick could seal another rate hike in October.
  • Canadian economy continues to grow strongly.

IG Client Sentimentshows retail are 46.3% net-long of USDCADa bullish contrarian sentiment indicator.

Canadian Dollar May Receive a Boost on Latest Inflation Report

The Canadian dollar is currently treading water ahead of the July CPI report with the market expecting a 0.1% month-on-month rise and a 2.5% annualized reading, both unchanged from last month’s strong report. Canadian CPI grew at its fastest rate in over six years in June, due to higher energy prices, and another strong reading today will increase pressure on the Bank of Canada to hike rates again, probably at the October meeting. The central bank has already hiked rates by 0.25% twice this year and by a total of four times in the last 12 months. Last week data showed Canadian unemployment falling to 5.8% from a prior 6% while employment grew by 54.1k against expectations of 17K and a prior month’s 31.8k.

USDCAD has remained in a 1.2950 – 1.3200 range over the last month, despite the strength of the US dollar and fears over the NAFTA negotiations. The pair currently trade at 1.3130, just above 23.6% Fibonacci support at 1.3118 and below the July 24 high at 1.3192. An inline or slightly stronger-than-expected reading would seal another 0.25% rate hike and see USDCAD break lower with the 38.2% Fibonacci retracement at 1.2952 the short-term target. A weaker-than-expected reading today would see the July 24 high under pressure.

We have recently released our Q3 Trading Forecasts for a wide range of Currencies and Commodities, including the Canadian Dollar.

USDCAD Daily Price Chart (January – August 17, 2018)

Canadian Dollar (CAD) Eyes Latest Inflation Report

DailyFX has a vast amount of updated resources to help traders make more informed decisions. These include a fully updated Economic Calendar, and a raft of Educational and Trading Guides

— Written by Nick Cawley, Analyst

To contact Nick, email him at nicholas.cawley@ig.com

Follow Nick on Twitter @nickcawley1



Source link

Continue Reading

Forex

USD/CNH & Gold Price Action Point to Reversals Gaining Traction

Published

on

By


Gold, USD/CNH Technical Highlights

  • Gold price reversal and sentiment supportive of a low
  • Correlation between Gold & CNH extremely high
  • USD/CNH reversing hard from near Dec ’16 peak

For an in-depth intermediate-term technical and fundamental outlook, check out the Q3 Gold Forecast.

Gold price reversal and sentiment supportive of a low

On Wednesday, we were discussing the oversold, overly bearish backdrop in gold, but that first we needed to see some type of swift flush and reverse or something of that nature before looking for a low. We didn’t have to wait long, as the past few sessions qualified as flush-and-reverse price behavior, with silver, unsurprisingly and in silver-like fashion, displaying even more capitulation-like behavior, shedding 3 of its 4% in an hour on Wednesday.

As long as gold & silver can hold onto yesterday’s lows on a closing basis, we’re looking for at least a rebound back to the point of origination of the most recent leg lower (~1210 & 15.30). If another leg lower develops we’ll have to reassess.

Check out the IG Client Sentiment to see how other traders are positioned and why it can be used as a contrarian indicator.

Gold Daily Chart (Flush & Reverse)

Gold daily chart, flush and reverse

Correlation between Gold & CNH extremely high

If gold is reversing then so is CNH and vice versa. Gold and CNH have a 3-month correlation of 97%. They are effectively the same market at this juncture. How one plays it is up to the instrument of choice, but be mindful of total risk if trading both.

Gold/CNH Daily Chart (97% 3-mo Correlation)

Gold/CNH daily chart (97% 3-mo correlation)

USD/CNH reversing hard from near Dec ’16 peak

USD/CNH is in the process of carving out a weekly key-reversal bar just shy of the December 2016 high, assuming it doesn’t post a big rally from here. Trade a little higher today or lower and the reversal currently in place will stand as confirmed.

The candle development along with a break in the upward channel on the daily time-frame should usher in more selling, and perhaps in swift fashion. Looking lower, there are minor levels along the way that were carved out as the channel matured, but the broader target is the bottom of the upward grind since last month, right around the 6.60 mark.

USD/CNH Weekly Chart (Key-reversal nearly complete)

USD/CNH weekly chart, key-reversal as long as no sizable rally ensues today

USD/CNH Daily Chart (Channel break to send it lower)

USD/CNH daily chart, channel break to send price lower

Resources for Forex & CFD Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

—Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX



Source link

Continue Reading

Trending

Copyright © 2017 Zox News Theme. Theme by MVP Themes, powered by WordPress.