Near-term Setups in EUR/USD, Bitcoin & Ethereum
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Here's an update on the setup's I’m tracking into the start of the week. Find a detailed, in-depth review of both these setups and more in today’s Strategy Webinar.
EUR/USD Daily Chart
Last week I noted that the ‘battle lines’ were drawn for the Euro as the pair set a clear monthly opening range just below long-term slope resistance. Heading into FOMC the focus will be on a break of this between 1.1850 & the yearly high-day close at 2035. From a trading standpoint, I’ll favor selling strength within this range with a break below the median-line needed to suggest a more significant near-term top is in play. Ultimately I’d be looking for long-entries near- 1.1680 – 1.17.
We warned of a deeper correction in Bitcoin prices last week with the subsequent drop probing just below the 3023/33 confluence support zone before rebounding sharply. The subsequent rally is now approaching the underside of the median-line as resistance. Look for a reaction here with a close above 4213 needed to validate resumption of the broader uptrend targeting the upper parallel ~4600. From a trading standpoint look for a pullback here but prices should stabilize above the reversal day close at 3700 if we’re heading higher. Things are about to get interesting here.
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- A summary of IG Client Sentimentshows traders are net-long Bitcoin (BTCUSD) - the ratio stands at +1.8 (64.2% of traders are long)- bearish reading
- Long positions are 1.8% lower than yesterday and 11.5% lower from last week
- Short positions are 23.9% higher than yesterday and 20.6% higher from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Bitcoin (USD) 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 (USD) price trend may continue higher despite the fact traders remain net-long.
See how shifts in retail positioning are impacting trend.Learn how Sentiment can help your trading in this free guide!
ETHUSD:A similar scenario is playing out in Ethereum prices, which probed even deeper below support last week before recovering. The levels remain unchanged from last week’s update with key near-term support raised to 259.
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---Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michaelon Twitter @MBForex or contact him at firstname.lastname@example.org
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.