Analyst Picks

Michael Boutros , Currency Strategist

My Picks:  Near-term Setups in EURUSD & EURNZD
Expertise:  Short-term Technical
Average Time Frame of Trades:  1-3 Days

EURUSD 240min

EUR/USD 240min Chart

Earlier this week we highlighted that the rally in EURUSD was testing a ‘decision point’ at the 1.07-handle with a decisive breach through this region taking out targets into the 61.8% retracement at 1.0777. The rally is vulnerable here with the immediate focus back on the 1.07-handle - looking for a reaction there. A break lower would shift the focus back towards the monthly open with our bullish invalidation level now raised to the 100-day moving average / slope confluence at ~1.0630. Topside targets remain unchanged.

See our 2Q Euro projections and more in the DailyFX Trading Forecasts.

Near-term Setups in EURUSD & EURNZD
  • A summary of IG Client Sentiment shows traders are net-short EURUSD- the ratio stands at -1.36 (42.4% of traders are long)- bullish reading
  • The percentage of traders net-long is now its lowest since Mar 28 when EURUSD traded near 1.0814
  • Long positions are 14.2% lower than yesterday and 38.3% lower from last week
  • Short positions are 1.2% lower than yesterday but 35.6% higher from last week
  • Broader sentiment continues to point higher with the recent build in short-positioning further highlighting the long-bias. From a trading standpoint, I’d be looking to fade weakness into structural support with a breach above 1.0819 needed to open up the next BIG leg higher in the pair.

What do shifts in retail positioning hint about the broader Euro trend? Learn how Sentiment can help your trading in this free guide!

EURNZD: We got the initial drop & pop we were looking for but the rally fizzled out just ahead of the 1.54-target. Similar expectations here as EURUSD with our levels unchanged. Look for the pullback to get long with our near-term bullish invalidation level now raised to the low-day close at 1.5180. Latest EURNZD update.

---Written by Michael Boutros, Currency Strategist with DailyFX

Join Michael for Live Weekly Trading Webinars on Mondays on DailyFX at 12:30GMT (8:30ET)

Follow Michaelon Twitter @MBForex contact him at mboutros@dailyfx.com or Click Here to be added to his email distribution list.

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Jamie Saettele, CMT , Sr. Technical Strategist

My Picks:  Bullish EUR/NZD
Expertise:  Technical
Average Time Frame of Trades:  Swing

I'm bullish EUR/NZD whilst above Monday's low and looking for major upside (could break a multiyear trendline) but would note just above 1.5800 as a spot to take some off if it works.

Long term pattern - the rally from the 2015 low in impulsive (5 waves) and the decline from the 2015 high to the 2017 low is corrective (3 waves...classical chartist could call it a wedge too). The implication is that price will exceed the 2015 high while remaining above the 2015 low.

Short term pattern - the rally from the February low is impulsive (5 waves) and the decline from the March high is corrective (3 waves).

Recent action / Market Levels - Monday's low was at the top side of former corrective channel resistance (blue line on this chart). I call this the sling shot. It's my favorite setup. The recent low is also in line with lows from 2016 (July and September). Finally, Monday's low is 3 pips below the year open price...now that's respect. The drop on Friday completed a short term head and shoulders top. It did not last. Some of the best setups occur from failed patterns. That's a possibility here.

Looking for ideas and forecasts? Visit the DailyFX guides and forecasts page. Also, check out the webinar schedule.

Are you positioned with the crowd? Check the IG Client Sentiment page to find out.

EURNZD Daily

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Walker England , Forex Trading Instructor

My Picks:  USD/JPY Pending Breakout
Expertise:  Technical Analysis
Average Time Frame of Trades:  1Day-1Week

Market Condition: USD/JPY Pending Breakout

Target 1: ______ 106.55

Target 2:______104.97

USD/JPY, Daily Chart & ATR

USD/JPY Next Pending Breakout

(Created Using IG Charts)

For the last USD/JPY breakout update, initial bearish price targets were set at 109.86 and 108.19. As of last Monday, the pair has traded through this final target and is now retracing off of yearly lows at 108.13. As such, traders may again plan for fresh bearish breakouts beneath the new standing low. Daily ATR for the USD/JPY now stands at 79 pips. This means that traders looking for a 2x ATR extension may find price targets near 106.55. Using a 1x ATR stop at 108.92 may be considered, creating an initial 1:2 risk/reward ratio.

Currently the 200 day MVA (simple moving average) for the USD/JPY is found at 109.95. In the event that the pair fails to breakout and rebounds higher, traders may consider deleting any pending orders to sell the market. In this bullish scenario, traders may reevaluate the USD/JPY trend and place new entries in the markets chosen direction.

--- Written by Walker, Analyst for DailyFX.com

To Receive Walkers’ analysis directly via email, please SIGN UP HERE

See Walker’s most recent articles at hisBio Page.

Contact and Follow Walker on Twitter @WEnglandFX.

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Jeremy Wagner, CEWA-M , Head Forex Trading Instructor

My Picks:  Long EUR/JPY
Expertise:  Elliott Wave, Technical Analysis
Average Time Frame of Trades:  Multiple Weeks

EUR/JPY may have put the final changes on a correction. There is a confluence of support and wave relationships coming in near 114.70 to 115.50 including:

  • Support trend line connecting July 2016, Sept 2016, October 2016 lows (near 115.50)
  • 78.6% retracement of October 2016 to December 2016 up trend (115.11)
  • 0.618 extension of March 12-April 4 down trend (114.69)
  • 1.618 extension of March 12-23 down trend (114.68)

EUR/JPY Daily Chart

EUR/JPY Bounces 120 Pips From Weekly Low

Earlier this week a low of 114.85 was achieved and may provide a lasting low as the a-b-c zigzag may have ended completing an Elliott Wave 5-3 sequence.

Those multiple levels above appearing in the same area suggests a bounce is likely. We will use a break of the trend line near 116.60 as a clue the mood of the market may be changing.

EUR/JPY 4 Hour Chart

EUR/JPY Bounces 120 Pips From Weekly Low

Trader sentiment has been growing net long since early December when the pair was trading near 122. In early December the sentiment reading was 32% long (or -2.1) and has increased to 72% net long (+2.5). Sentiment is a good contrarian signal so we will watch and see if it begins to decrease. If it decreases upon a price break of 116.60, then we will have confirmation a breakout higher. Read more about trading strategies using sentiment with this sentiment guide.

EUR/JPY Bounces 120 Pips From Weekly Low

Risk can be set just below the recent swing low. Earlier this week, EUR to JPY achieved a low of 114.85 and that level could be a conservative risk level. We are targeting new highs above 124 and possibly higher.

Join Jeremy in his Monday US Opening Bell webinars to discuss this market.

Interested in learning more about Elliott Wave Theory? Watch these videos on trading with Elliott Wave.

Lastly, check out our longer-term forecast for EUR and JPY.

---Written by Jeremy Wagner, Head Trading Instructor, DailyFX EDU

Follow me on Twitter at @JWagnerFXTrader .

See Jeremy’s recent articles at his Bio Page.

To receive additional articles from Jeremy via email, join Jeremy’s distribution list.

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Paul Robinson , Market Analyst

My Picks:  Short EURNZD on confirmed neckline break
Expertise:  Technical
Average Time Frame of Trades:  Several days to several weeks

Check out our top trade ideas for 2017 on the Trading Guides page.

EURNZD is in the process of completing a ‘head-and-shoulders’ formation, with the ‘neckline’ currently coming under pressure at the time of this writing. Some may view it as a double-top given the proximity of the ‘head’ and ‘left shoulder’, in any event a breach of the neck-line is the technical trigger. The development of this bearish sequence also comes at an interesting spot, with a trend-line from September 2015 coming down over the ‘head’.

The confluence of trend direction, trend-line resistance, and pattern development make this a compelling set-up. The official trigger will be on a closing daily bar below the neckline, and will also put EURNZD beneath the 200-day MA which it has held well since mid-March.

The measured move target (MMT) is about 300 points lower, under 14900, aligning very near an area of support running back to November. The second target arrives at the lows from February in the vicinity of 14589/35. The stop should be set sufficiently above the neckline to avoid a shake-out. The distance between the entry, stop, and targets make for a good risk/reward situation.

EURNZD: Daily

EURNZD – Short on Break of Neckline

Created with TradingView

Entry – Daily close below the neckline

Stop – 15265

Target 1 – Measured move target/support @ 14875

Target 2 – 14589/14535 zone

See the Webinar Calendar for a schedule of upcoming live events with DailyFX analysts.

---Written by Paul Robinson, Market Analyst

You can receive Paul’s analysis directly via email by signing up here.

You can follow Paul on Twitter at @PaulRobinonFX.

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