AUD/USD, USD/CAD, EUR/USD Price Outlook Using Sentiment
AUD/USD, USD/CAD, EUR/USD, IG Client Sentiment Outlook - Talking Points:
- Learn how to use IG Client Sentiment as a another element in your strategy
- Trader positioning hints AUD/USD and EUR/USD downtrend may prolong
- Meanwhile, rising net short bets may keep fueling the uptrend in USD/CAD
Join me on Wednesdays at 01:00 GMT as I cover what IG Client Sentiment is saying about the prevailing trends in financial markets!
This week, I covered what trader positioning was revealing about the outlook for AUD/USD, USD/CAD and EUR/USD amid fundamental developments. The Australian Dollar is at risk should US-China trade talks collapse following a dismal local jobs report. Meanwhile, rising bets of a rate cut from the Bank of Canada has been weighing against the Loonie. Will the Euro weaken as ECB minutes crosses the wires next week?
To learn more about using IG Client Sentiment in your own analysis, check out our free trading guide!
Australian Dollar Sentiment Outlook
According to the latest IG Client Sentiment Report from November 13, data shows that about 59 percent of traders are net long AUD/USD. Traders are further biased to the upside from yesterday and last week.The combination of current sentiment and recent changes offers a stronger bearish-contrarian trading bias. This speaks to greater willingness to buy as traders attempt to pick the bottom in recent Aussie weakness.
AUD/USD is on its way to closing under the near-term rising support channel from late September – pink parallel lines below. After a top at descending resistance from December 2018, prices may accelerate the descent towards lows achieved in August, September and early October. These combine to create a key psychological barrier between 0.6677 and 0.6717.
AUD/USD Daily Chart
Canadian Dollar Sentiment Outlook
Since USD/CAD bottomed in late October, its 1.65 percent rise has been accompanied by fading net-long positioning. Now, about 41.00 percent of USD/CAD traders are biased to the upside. Traders are further net short than yesterday and last week.The combination of current sentiment and recent changes produces a stronger USD/CADbullish-contrarian trading bias.
The near-term rise in USD/CAD followed the emergence of a Morning Star bullish candlestick pattern. Once upside confirmation was achieved, prices accelerated their uptrend. After resistance was taken out at 1.3226, the Canadian Dollar is aiming for the former rising support line from July – red line below. A daily close above 1.3288 may pave the way for a retest of October highs.
USD/CAD Daily Chart
Euro Sentiment Outlook
Meanwhile, retail trader positioning is showing that about 61.10 percent of EUR/USD participants are net long. This is compared to just 40% upside bias before prices topped at the beginning of November. Traders are now further net-long than yesterday and compared to last week, and the combination of current sentiment and recent changes results in a stronger EUR/USDbearish-contrarian trading bias.
EUR/USD has accelerated its selloff after prices closed under the rising support channel from the beginning of October. A further decline under former support at 1.1076 opened the door to a reversal of the near-term uptrend. That places the focus on the next potential level of support at 1.0926 – the September 3 and 12 low. A further close under then exposes key range support which is between 1.0879 to 1.0898.
EUR/USD Daily Chart
*IG Client Sentiment Charts and Positioning Data Used from November 13 Report
Australian Dollar, Canadian Dollar, Euro Trading Resources
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--- Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com
To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.