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.
Talking Points
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[li]Weekly Scalp Webinar archive covering featured setups post NFP
[/li][li]Updated targets & invalidation levels
[/li][li]Event Risk on Tap This Week
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AUD/JPY Daily
Technical Outlook
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[li]AUD/JPY holding below channel resistance off the October high
[/li][li]Interim support 86.13/28- Break lower targets 85.46 & 84.58/72
[/li][li]Resistance at 87 backed by near-term bearish invalidation 87.43/50
[/li][li]Daily RSI support-trigger pending- break would be bearish
[/li][li]Key Event Risk Ahead: Aussie Unemployment tomorrow and Japan Industrial Production & GDP later this week
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The Euro has broken through all meaningful levels of volume-based support versus the US Dollar, and risks remain for a return to multi-year lows near the $1.05 mark. Resistance now stands at former support near $1.08, but we would need to see a break above more substantive volume-based resistance levels starting at $1.10 to call for a larger EUR rebound.
EUR/USD Volume at Price Chart
Total Buy Volume Executed, Total Sell Volume Executed, Net Volume Executed (Buy-Sell)
Length of bar indicates the sum of Buy and Sell volume.
Data source: FXCM Real Directional Volume Indicator
See more information on DailyFX on the Real Volume and Transactions indicators
See full analysis in this week’s Speculative Sentiment Index (SSI) report by David Rodriguez on DailyFX.com
Today, currency analyst James Stanley discusses what he considers the top three risks facing global markets right now.
[B]RISK #1: Liquidity[/B]
For more details on all 3 risks identified by James Stanley, see his article on DailyFX.com.
There is no doubt that Yuan joining SDR basket is a milestone event, but for investors and traders, how would you benefit from this new development?
In her latest article on DailyFX.com, Renee Mu discusses a list of opportunities that you may be able to use to invest in China at the moment or in the near future.
In his article on DailyFX.com, head forex trading instructor Jeremy Wagner discusses the big week for EUR/USD.
[I]“As we look through the technical patterns, it appears the higher probability move is for a couple hundred pips of US Dollar weakness. This could send the EUR/USD higher towards 1.08-1.09.”[/I]
Tomorrow’s ECB meeting is looking to be one of the more significant European announcements in months, if not years.
Currency analyst James Stanley discusses how to prepare for it in his article today on DailyFX.com.
The Speculative Sentiment Index (SSI) has a new format on DailyFX.com and the latest SSI readings show that despite the spike in the EUR/USD exchange rate after today’s ECB rate decision, the retail crowd has flipped net-short EUR/USD.
An SSI value of -1.8956 for EUR/USD means that 65% of retail traders are short the pair. Since SSI is a contrarian indicator, that’s a strong signal that EUR/USD can go even higher.
DailyFX currency strategist Christopher Vecchio says, "Mark your calendar for December 16: markets are honing in for the first Federal Reserve rate hike in two weeks after the November US Nonfarm Payrolls report.
“The data, which was truly a ‘Goldilocks’ print – not too hot, not too cold – confirmed recent labor market trends that should keep the Federal Reserve confident enough that the US economy is continuing to heal.”
A major turn in retail FX positions warns that the US Dollar may lose further against these major counterparts.
See real time Speculative Sentiment Index (SSI) data on the new retail trader Sentiment page on DailyFX.com
Chief currency strategist John Kicklighter discusses how the upcoming Fed rate decision has the potential to cause big market moves in his article on DailyFX.com.
Talking Points
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[li]Though there is still some doubt, the market consensus now expects the Fed to hike December 16
[/li][li]Even if a rate hike is realized, the market has priced in far more than what ‘liftoff’ insinuates
[/li][li]We look at a range of visuals that show why this may be a critical event for the global markets
[/li][/ul]
A couple of different scenarios could unfold following the FOMC meeting tomorrow. While it is widely expected the Fed will raise rates, what is not so clear is the path the Fed will take after embarking on a tightening cycle.
[B]Gold Daily: Aug '15 - Present[/B]
If the Fed signals an even more gradual pace of rate increases than the market expects, we will likely see an immediate sell-off in the dollar and rise in precious metals.
[ul]
[li][B]US Dollar:[/B] Greenback Looks in Trouble Heading into New Year
[/li][li][B]International Equities:[/B] S&P 500, World Equities at Risk of Major Correction
[/li][li][B]Gold Price Forecast:[/B] Sell-Off May Accelerate as Fed Likely to Hike Rates
[/li][li][B]Yen Forecast:[/B] Fed Rate Hikes and BoJ Action Points to USD/JPY Gains
[/li][li][B]Oil Price Forecast:[/B] No End in Sight for Oil Price Declines
[/li][/ul]
The forecasts above are all discussed today on DailyFX.com
Currency strategist Christopher Vecchio discussion the following in his article today on DailyFX.com:
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[li]Riksbank has been threatening intervention for the past several months.
[/li][li]Ability to intervene was codified on Monday with this release.
[/li][li]EUR/SEK move below 9.1000 would greatly raise odds of immediate intervention.
[/li][/ul]
