We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bearish
GBP/USD
Bearish
USD/JPY
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • So far this week, those fortunes have flipped as the Nasdaq is working on its second consecutive down-day while the Dow has, so far, rallied through both sessions. Get your #equities technical analysis from @JStanleyFX here:https://t.co/uafQxTayEY https://t.co/7iGh15koeL
  • That was an impressive recovery from the #SP500 during the #WallStreet session. What's interesting to see is the pro-risk #AUD and #NZD being unable to capitalize nearly as much versus stocks. Could momentum be fading? #USD $AUDUSD $NZDUSD https://t.co/YBg6wzgG2i
  • The U.S. House passes the Uyghur Human Rights Policy Act $FXI $USDCNH
  • Forex Update: As of 20:00, these are your best and worst performers based on the London trading schedule: 🇪🇺EUR: 0.25% 🇨🇦CAD: 0.20% 🇯🇵JPY: -0.16% 🇨🇭CHF: -0.27% 🇦🇺AUD: -0.43% 🇬🇧GBP: -0.60% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/WUkvzm2KzY
  • Silver has been beaten handily by gold in the rush to haven assets inspired by the contagion. However, the gold/silver ratio was rising steadily before this crisis and will probably continue to do so. Get your #silver market update from @DavidCottleFX here:https://t.co/00DiZn6XZS https://t.co/ygkaj7nHr6
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Silver: 0.83% Gold: 0.06% Oil - US Crude: -2.72% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/fmPVQRIybZ
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.90%, while traders in US 500 are at opposite extremes with 73.90%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/dvBsnLVAGy
  • 👏👏👏 https://t.co/Yikta9i2QK
  • #Gold prices are in correction off the monthly / yearly high with the pullback now approaching initial levels of up-trend support. Get your $XAUUSD technical analysis from @MBForex here: https://t.co/9gCzcf1MwK https://t.co/IbIiloSSuG
  • Indices Update: As of 20:00, these are your best and worst performers based on the London trading schedule: France 40: 0.60% Germany 30: 0.59% FTSE 100: 0.52% Wall Street: 0.03% US 500: 0.02% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/APGSoSp9Ig
A Crowded Trade?

A Crowded Trade?

2014-11-07 13:00:00
Kristian Kerr, Sr. Currency Strategist
Share:

Talking Points

  • Sentiment at multi-year extremes is several major currencies
  • Key long term-retracement ahead in the US Dollar Index

Unfamiliar with Gann Square Root Relationships? Learn more about them HERE.

The FXCM US Dollar Index traded sharply higher since bottoming around the key cycle turn window we highlighted last week (Read HERE). However, we are now starting to wonder if the index has gone “too far too fast” as sentiment towards the Buck is once again at or near multi-year extremes. On Thursday, for instance, our favorite metric for measuring sentiment the Daily Sentiment Index or DSI saw extreme readings in the euro, yen and franc as they all fell to just 3% bulls. Conversely the DSI for the ICE Dollar Index showed a reading of 95% bulls. From a contrarian standpoint, such deep conviction in the direction of the dollar is a bit unnerving to say the least - especially heading into payrolls. Interestingly we had a similar setup last month around payrolls as the euro printed 3% bulls on the DSI the day of the release. This led to a sharp rally in the single currency the following week as positions were adjusted. Of course the same thing doesn’t have to happen here, but with market participants all seemingly leaning the same way we wouldn’t completely discount it either. In the FXCM US Dollar Index the key price level to watch looks to be 11,310 as this marks the 78.6% retracement of the 2009-2011 decline. A clear failure around here could see the index come under a bit of pressure.

To receive other reports from this author via e-mail, sign up to Kristian’s e-mail distribution list via this link.

FXCM US Dollar Index Daily Chart: November 7, 2014

A Crowded Trade?

Charts Created using Marketscope – Prepared by Kristian Kerr

Key Event Risk in the Week Ahead:

A Crowded Trade?

LEVELS TO WATCH

Resistance: 11,310 (Fibonacci), 11,365 (Fibonacci)

Support: 11,255 (Fibonacci), 11,153 (WTD low)

Strategy: Sell FXCM US Dollar Index

Entry: Sell FXCM US Dollar Index next week if it fails to close above 11,310 over the next couple of sessions

Stop: 1-day close above 11,365

Target: 11,160

--- Written by Kristian Kerr, Senior Currency Strategist for DailyFX.com

To contact Kristian, e-mail instructor@dailyfx.com. Follow me on Twitter at@KKerrFX.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.