[I]Talking Points:[/I][ul][li]EUR/USD Preserves Long-Term RSI Formation Even as ECB Endorses Dovish Outlook.
[/li][li]NZD/USD Fails to Retain Monthly-Opening Range Ahead of New Zealand Trade Report.
[/li][*]USDOLLAR Clears Topside Targets & Eyes September High Ahead of Durable Goods Orders.[/ul]
Retail forex traders remain aggressively long the British Pound versus the US Dollar, and a contrarian view of crowd sentiment leads us to believe that a test of key GBP/USD lows remains likely.
The number of open long positions outnumber those short by 2.4 to 1; 71% of open positions are long.
[I]Talking Points[/I][ul][li]GBP/USD Eyes May Low (1.5088) Ahead of BoE Governor Carney’s Speech.
[/li][li]Euro September Opening-Range Remains in Focus Ahead of Slowing Euro-Zone CPI.
[/li][*]USDOLLAR Holds Previous Day’s Range Despite Upbeat Consumer Confidence.[/ul]
Talking Points[ul][li]Crude oil breaks resistance
[/li][li]Watch for support near $47 per barrel
[/li][*]Visit DailyFX.com for more analysis and trade setups[/ul]
As you can see in the chart below taken from James Stanley’s article on DailyFX.com, the past year has brought on two very different trends into German equities; as a breakneck up-trend was quickly began to fade out of the market after setting a new all-time high at 12,398.
This top provided a 48.5% movement higher in less than 6 months from the lows set on October 16th of last year. And since then, we’ve seen another trend develop, this time in the opposite direction, that’s seen -19.4% of the indexes value evaporate in the past six months.
Should the near-term weakness that’s been seen in the DAX continue to develop into even more economic pain, and should Central Bankers, led by the Fed, fail to provide support to global risk trends, the DAX may have more pain in its future. The October 2014 low could provide a very adequate near-term target at 8,351, and that’s ~16% off of current levels.
The US dollar finds itself on increasingly shaky footing as the retail crowd takes on more long USD exposure.
Latest Readings from the Speculative Sentiment Index (SSI)
The Japanese yen eyes gains versus the US dollar. The ratio of long to short positions in the USD/JPY stands at 2.28 as 70% of traders are long.
[B]Weekly Summary of Forex Trader Sentiment and Changes in Positioning[/B]
Yesterday the ratio was 1.98; 66% of open positions were long. Long positions are 5.4% higher than yesterday, and short positions are 8.5% lower than yesterday.
SSI is a contrarian indicator to price action, and the fact that the majority of traders are long gives signal that the USD/JPY may continue lower.
Talking Points[ul][li]Weekly DailyFX Scalp Webinar archive covering featured setups
[/li][li]Updated targets & invalidation levels
[/li][*]Event Risk on Tap This Week[/ul]
DailyFX chief currency strategist John Kicklighter tweeted this chart setup today:
“Started a short in $EURGBP with 100 pip stop. If it confirms a turn, I’ll build it up. Details in trading video”
To get the latest updates on all his trading ideas, you can follow John Kicklighter on Twitter.
Today in his article on DailyFX, forex trading instructor Tyler Yell discusses the following talking points:[ul][li]Crude Oil Technical Strategy: Setting Up For Breakout
[/li][li]WTI / Crude Oil Holding RSI(5) Support at 40 Into Support
[/li][li]Support (Daily Close Basis) Focus $45.65-$46.15[/ul]
[/li]
[I]Below is an excerpt from Christopher Vecchio’s weekly update on the Speculative Sentiment Index (SSI).[/I]
The retail crowd’s shift into heavier net-long US Dollar positions last week coincided with the start of the next leg lower across the USD-complex.
[B]Weekly Summary of Forex Trader Sentiment and Changes in Positioning[/B]
With these small speculators continuing to add to net-long US Dollar positions amid weakness, we still prefer to fade the crowd’s recent positioning shifts. As such, further declines in various USD-pairs in the days ahead seems like the likely outcome.
The ratio of long to short positions in the USDJPY stands at 2.79 as 74% of traders are long. Yesterday the ratio was 2.63; 72% of open positions were long. Long positions are 3.2% higher than yesterday and 10.5% above levels seen last week. Short positions are 2.9% lower than yesterday and 9.7% below levels seen last week.
We use our SSI as a contrarian indicator to price action, and the fact that the majority of traders are long gives signal that the USDJPY may continue lower. The trading crowd has grown further net-long from yesterday and last week. The combination of current sentiment and recent changes gives a further bearish trading bias.
Talking Points:[ul][li]GBP/USD Threatens Bearish RSI Formation- BoE Testimony in Focus.
[/li][li]EUR/USD Pullback Eyes Former Support- Dovish ECB on Tap?
[/li][*]USDOLLAR Mounts Larger Rebound Ahead of Fed Rhetoric.[/ul]
Talking Points
[ul]
[li]NZD/CAD posts reversal candle off key resistance- scalps favor shorts
[/li][li]Updated targets & invalidation levels
[/li][li]Event Risk on Tap This Week
[/li][/ul]
The latest version of Trading Station Desktop is now available for download.
We’ve made 176 performance enhancements to improve order execution and further stabilize the platform, along with many other polishes to functionality to optimize your trading experience. Below are a couple of the new features.
[B]Good-Till-Date Entry Orders
Market Behavior Indicators
[/B]
Technical Outlook
[ul]
[li]EUR/CAD is trading into resistance of a descending formation off the September highs
[/li][li]Resistance confluence & Bearish invalidation at 1.4956/80
[/li][li]Key support 1.4561/90- Break lower targets objectives at 1.4450 / ML support & 1.4891
[/li][li]A breach higher shifts focus back towards targets into the September high-day close at 1.5095
[/li][li]Key Event Risk Ahead: European Central Bank (ECB) Interest Rate Decision & Canada Retail Sales tomorrow & Canada Consumer Price Index (CPI) on Friday
[/li][li]
[/li][/ul]
On Friday October 23, 2015, GBP/JPY traded its largest volume in over 5 years.
Friday ended up as a daily close higher, but the high price of the day may kick off an aggressive Elliott Wave 3 lower. Jeremy Wagner discusses the implications in his article on DailyFX.com.
Our retail forex trader data warns that the Euro will likely continue lower as the US Dollar rallies across the board.
Quantitative strategist David Rodriguez discusses his sentiment-based outlook for the Euro and other major currencies in his Weekly Speculative Sentiment Index (SSI) report.
EUR/USD’s second-worst month of the year is November.
For more details, see Christopher Vecchio’s article on DailyFX.com
[I]Talking Points[/I]
[ul]
[li]GBP/USD holding descending channel ahead of key Event Risk
[/li][li]Updated targets & invalidation levels
[/li][li]Event Risk on Tap This Week
[/li][/ul]
The Speculative Sentiment Index (SSI) reveals that retail forex traders remain heavily short the US Dollar. The latest analysis by David Rodriguez on DailyFX.com points to continued USD gains against these key currencies.
