News & Analysis at your fingertips.

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.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
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
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
Mixed
Gold
Bearish
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
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • Heads Up:🇷🇺 CBR Press Conference due at 12:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-10-23
  • Heads Up:🇩🇪 Bundesbank Mauderer Speech due at 12:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-10-23
  • The Spinning Top candlestick pattern forms part of the vast Japanese candlestick repertoire with its own distinct features. Gain a better understanding of the spinning top candlestick here: https://t.co/yXomAftdv8 https://t.co/9N3XRViUin
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.61%, while traders in EUR/USD are at opposite extremes with 69.17%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/4I6evWndsv
  • There is a great debate about which type of analysis is better for a trader. Is it better to be a fundamental trader or a technical trader? Find out here: https://t.co/aVAzFypAg1 https://t.co/afeXKfZT4K
  • 🇷🇺 Interest Rate Decision Actual: 4.25% Expected: 4.25% Previous: 4.25% https://www.dailyfx.com/economic-calendar#2020-10-23
  • Commodities Update: As of 10:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.43% Gold: 0.29% Silver: 0.05% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/joUZve1zxA
  • Forex Update: As of 10:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.44% 🇳🇿NZD: 0.36% 🇨🇭CHF: 0.32% 🇯🇵JPY: 0.20% 🇨🇦CAD: 0.17% 🇬🇧GBP: 0.02% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/jitwr50kLY
  • Heads Up:🇷🇺 Interest Rate Decision due at 10:30 GMT (15min) Expected: 4.25% Previous: 4.25% https://www.dailyfx.com/economic-calendar#2020-10-23
  • Indices Update: As of 10:00, these are your best and worst performers based on the London trading schedule: FTSE 100: 1.38% France 40: 1.05% Germany 30: 0.78% Wall Street: 0.26% US 500: 0.22% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/T1eJUg4Xb4
EUR/USD Head & Shoulders Still Valid; Asymmetric Risk for GBP/USD

EUR/USD Head & Shoulders Still Valid; Asymmetric Risk for GBP/USD

2017-10-31 11:46:00
Christopher Vecchio, CFA, Senior Strategist
Share:

Talking Points:

- The DXY Index held the neckline retest of its inverse head & shoulders pattern at 94.29, while EUR/USD's retest of its head & shoulders pattern of 1.1663 held up as well.

- With a BOE rate hike nearly 100% priced-in for Thursday, the event poses asymmetric risk to the British Pound.

- Retail trader sentiment suggests the near-term outlook for the US Dollar is neutral.

Upcoming Webinars for Week of October 29 to November 3, 2017

Wednesday at 6:00 EDT/10:00 GMT: Mid-Week Trading Q&A

Thursday at 7:30 EDT/11:30 GMT: Central Bank Weekly

See the full DailyFX Webinar Calendar for other upcoming strategy sessions

The US Dollar is turning back higher today following small losses to start the week, as attention is quickly shifting from the USD-negative political chaos in Washington, D.C. to the expected USD-positive economic developments over the coming days.

Even though market participants are widely dismissing tomorrow's FOMC meeting as a meaningful event - there is a 0% chance of a rate hike, per Fed funds futures - the simple confirmation of the intention to raise rates next month should at a minimum buoy the greenback. Likewise, with a very strong October US Nonfarm Payrolls report due on Friday (really just a 'give-back' number after Hurricanes Harvey and Irma impacted the September report), the market mood is still looking favorable for the US Dollar.

Signifiant technical advances were made by the DXY Index last week with the close through 94.29, the July 26 bearish outside engulfing bar and neckline of the inverse head & shoulders pattern that has formed over the past three months. With the daily 8-, 13-, and 21-EMA moving average envelope rising into the neckline, it appears this level is firming up as key support as we turn into November.

Chart 1: DXY Index Daily Timeframe (June to October 2017)

EUR/USD Head & Shoulders Still Valid; Asymmetric Risk for GBP/USD

Accordingly, with the Euro constituting 57.6% of the DXY Index, it's of no surprise then that the EUR/USD head & shoulders pattern remains valid against 1.1663. The rest that came yesterday proved fruitless, and the batch of mixed Euro-Zone GDP and inflation data earlier today has done no favors for the Euro to help it shake off the bearish sentiment emanating from the ECB meeting last Thursday.

See the above video for technical considerations in the DXY Index, EUR/USD, USD/CHF, USD/CAD, and CAD/JPY, as well as why GBP/USD may be facing asymettric risk at the BOE meeting on Thursday, given the degree to which a rate hike is priced in relative to the possibility that no hike transpires at all.

Read more: FX Markets Brace for Big Week: EZ CPI; BOJ, FOMC, & BOE; US NFP

--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher's e-mail distribution list, please fill out this form

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

DISCLOSURES