Support & Resistance

Last updated:
S - Strong
   |   
M - Moderate
   |   
W - Weak
   

EUR/USD Technical Analysis: Eyeing Resistance Above 1.17 Mark

Fundamental analysis, economic and market themes

Connect via:

To receive Ilya's analysis directly via email, please SIGN UP HERE

Talking Points:

  • EUR/USD Technical Strategy: Flat
  • Euro breaks 14-month resistance, aims to extend gains vs. US Dollar
  • Nascent RSI divergence, turning sentiment argues against long trade

The Euro looks set to continue its upward march after prices powered through resistance liming the upside against the US Dollar since early May 2016. That the single currency’s stubborn upward push is happening in defiance of the ECB seems to imply formidable conviction.

A daily close above the 38.2% Fibonacci expansion at 1.1722 opens the door for a challenge of the 50% level at 1.1830. Alternatively, a reversal back below resistance-turned-support at 1.1588 – the 23.6% Fib – paves the way for a retest of the 14.6% expansion at 1.1505.

As resilient as the Euro seems, a long trade chasing it higher doesn’t appear attractive. Early signs of negative RSI divergence may be seeping through to hint at ebbing momentum, a sense reinforced by shifting sentiment studies. With that in mind, a wait-and-see approach is probably prudent.

What will drive the longer-term trend in the Euro? See our forecast here!

EUR/USD Technical Analysis: Eyeing Resistance Above 1.17 Mark


USD/JPY Price Analysis: Bearish Reversal Exposing USD Weakness

Position Trading based on technical set ups, Risk Management & Trader Psychology.

Connect via:

Want our fresh USD/JPY outlook for Q3? Access our free forecasts by clicking here.

Highlights:

  • USD/JPY technical strategy: flat, watching DXY to see if a downturn is dollar driven
  • USD/JPY Bearish reversal likely to put pressure on prior resistance/ 38.2% Fibo
  • Strengthening yield correlation of USD/JPY puts focus on Yellen testimony/ CPI
  • IGCS shows the USD/JPY tide may soon be turning

USD/JPY has seen an abrupt change of course in the last 24 hours of trading. After a month long hike from 108.8 to 114.49 on Wednesday, we’ve seen a sharp turnaround. The price pattern looks like an evening start reversal, but there are few things to note. First, the USD and JPY are the two weakest currencies in G8 on a relative measure (240-minute chart against a 200-MA). Second, the correlation to JPY and yields has pushed higher (meaning stronger) to recent positive extremes when looking over the last decade. Third and last, the Fed appears to be pulling back from their hawkishness as other central banks are pushing forward and Friday’s CPI could be crucial in the upcoming trend for US yields. A miss in the CPI print on Friday, and we may see a chipping away of the pricing in for a Q4 hike, which would likely take USD/JPY lower.

Watch the US CPI print number as it is announced by clicking here

While some may look at a stronger JPY (lower USD/JPY) as a sign that we’re in the risk-off mood, it’s worth noting that as two weak currencies, the directional pulls of this pair should not be applied to the overall market. Given the strength of the Canadian Dollar, Australian Dollar, or Euro, it may be more appropriate to watch CAD/JPY or EUR/JPY before casting judgment that the market is shifting to risk-off mode.

Recommended reading: AUD/JPY may be another JPY pair to approach YTD highs

The chart below shows that the pullback earlier this week happened near the May and March high. Prior peaks are excellent zones for resistance, and only a strong trend with momentum can be expected to breakthrough. A miss on Friday’s US CPI could set up a strong retracemSent of the recent +5.2% move to the Fibonacci retracement zone of 112.32-110.98.

We have recently seen the Bank of Japan adjust their focus of their Yield Curve Control arm of their QQE. Therefore, when the dust settles, it is fair to assume that USD/JPY, and other JPY crosses will arise as a Fed that continues to hike will still eventually push up yields despite the short-term noise. A break and a weekly close below 110 would cause this view to be reviewed.

Join Tyler in his Daily Closing Bell webinars at 3 pm ET to discuss market developments.

USD/JPY Price Analysis: Bearish Reversal Exposing USD Weakness

Chart Created by Tyler Yell, CMT

USD/JPY IG Trader Sentiment:The USD/JPY tide may soon be turning

USD/JPY Price Analysis: Bearish Reversal Exposing USD Weakness

What do retail traders’ buy/sell decisions hint about the JPY trend? Find out here!

USDJPY: Retail trader data shows 49.0% of traders are net-long with the ratio of traders short to long at 1.04 to 1. The number of traders net-long is 13.0% lower than yesterday and 21.1% lower from last week, while the number of traders net-short is 14.5% lower than yesterday and 6.5% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USDJPY prices may continue to rise. Positioning is less net-short than yesterday but more net-short from last week. The combination of current sentiment and recent changes gives us a further mixed USDJPY trading bias.. (Emphasis Mine)

---

Written by Tyler Yell, CMT, Currency Analyst & Trading Instructor for DailyFX.com

To receive Tyler's analysis directly via email, please SIGN UP HERE

Contact and discuss markets with Tyler on Twitter: @ForexYell


GBP/USD Technical Analysis: Back to 1.3000, Now What?

Price Action, Swing & Short Term Trade Setups

Connect via:

To receive James Stanley’s Analysis directly via email, please sign up here.

Talking Points:

- GBP/USD Technical Strategy: Mixed longer-term, mixed near-term.

- GBP/USD set a fresh 10-month high earlier in the week; but has since reversed with prices falling back-below the vaulted psychological level of 1.3000.

- If you’re looking for trading ideas, check out our Trading Guides. They’re free and updated for Q1, 2017. If you’re looking for ideas more short-term in nature, please check out our IG Client Sentiment.

In our last article, we looked at the bullish break of the bull flag formation in GBP/USD. As we shared, this opened the door to bullish continuation strategies, as a recent influx of hawkish clues pointed to the fact that the BoE might need to look at rate hikes sooner rather than later. At the center of that argument, however, was inflation.

Inflation is the elephant-in-the-room of the British economy at the moment. After the ‘sharp repricing’ in the value of the British Pound around the Brexit referendum and the ensuing dovish campaign from the BoE, the prospect of stronger inflation seemed simply mathematical. As prices in GBP/USD had dropped by more than 20% in a very short period of time, logically, we would see prices beginning to rise for the import-heavy economy. But despite this risk, the BoE remained uber-dovish under the expectation that the risks of Brexit hitting the British economy would far outweigh the risks of stronger inflation.

The brutal slowdown that the BoE was expecting around Brexit hasn’t really shown up. But inflation has continued to rise, and last month saw CPI come in at an annualized 2.9% clip, which had started to create a bit of commotion within the BoE; and at last month’s rate decision, we saw the most votes for a rate hike since 2011 as the MPC voted 5-3 to hold rates flat. In the following weeks, we heard from various members of the BoE that opined that higher rates might be necessary to ward off these stronger inflationary forces. When Mark Carney made similar remarks, warning that rate hikes may be on the horizon for the U.K., the British Pound went into full-bull mode as prices drove above the psychological 1.3000 level.

GBP/USD Four-Hour Chart: Bullish Move Drives Above 1.3000, Albeit Temporarily

GBP/USD Technical Analysis: Back to 1.3000, Now What?

Chart prepared by James Stanley

On Tuesday of this week, U.K. inflation for the month of June was released. Inflation came-in at an annualized 2.6%, falling below the expectation of 2.8%. This seemingly removed a bit of pressure from the situation, as softer inflation can allow the BoE more time before needing to adjust rates. In response to this softer inflation print, the British Pound fell against most major currencies; the U.S. Dollar included even as the Greenback was driving down to fresh yearly lows.

This leaves Cable in a fairly vulnerable state, and this can urge caution for the bullish continuation approach, particularly as the pair trades below the venerable 1.3000 level. Bearish price action has begun to show on the hourly chart as support has been unable to hold. Should the lower-high that printed at 1.3020 remain respected in early trade next week, this can open the door to short-term bearish momentum strategies in the search for a continuation of lower-lows and lower-highs.

Cable Hourly: Bearish Momentum Beginning to Show with Lower High’s and Low’s

GBP/USD Technical Analysis: Back to 1.3000, Now What?

Chart prepared by James Stanley

--- Written by James Stanley, Strategist for DailyFX.com

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Contact and follow James on Twitter: @JStanleyFX


USD/CHF Technical Analysis: Trend-Line Support as New Resistance

Price Action, Swing & Short Term Trade Setups

Connect via:

Talking Points:

- USD/CHF Technical Strategy: Longer-term range-bound, intermediate-term bearish & shorter-term mixed.

- USD/CHF price action remains rather messy after breeching-below a key support zone earlier in the month.

- If you’re looking for trading ideas, check out our Trading Guides. They’re free and updated for Q1, 2017. If you’re looking for ideas more short-term in nature, please check out our IG Client Sentiment.

To receive James Stanley’s Analysis directly via email, please sign up here.

In our last article, we looked at a confluent zone of support in USD/CHF in the effort of catching a topside move in the pair. And while that support held for a few days, it was unable to offset the continued drive of sellers until, eventually, support gave way as price action set a fresh seven-month low at .9614. Making up that support zone were two longer-term Fibonacci levels combined with a bullish trend-line projection that can be found by connecting the May, 2015 low to the low from last November’s elections.

USD/CHF Technical Analysis: Trend-Line Support as New Resistance

Chart prepared by James Stanley

You might notice that near-term price action in USD/CHF looks a bit messy at the moment; and since we’ve run into this confluent zone of support, shorter-term price action in Swissy has been very much like barbed wire. So, for clarity’s sake, we’re dialing out to the weekly chart below, and isolating this trend-line in the effort of getting a better perspective of current dynamics in USD/CHF price action.

USD/CHF Technical Analysis: Trend-Line Support as New Resistance

Chart prepared by James Stanley

The above chart helps to highlight how we may be looking at what could be bearish continuation prospects in USD/CHF. There are, however, some challenges to such an approach given our current context, chief of which is the fact that the U.S. Dollar appears to be gaining ground, and this, of course, could be a headwind for short USD/CHF scenarios.

However, for those that are looking for or are comfortable with taking on short-USD exposure, attractive risk-reward could be available by trading on recent price action dynamics. On the chart below, we’re looking at three support and resistance levels applied to USD/CHF based on recent price action. Traders that are entertaining a short stance can look to wedge stops above either level of resistance based on how aggressively they want to treat the move, while the three support levels can be used as profit target(s) for a down-side approach.

USD/CHF Technical Analysis: Trend-Line Support as New Resistance

Chart prepared by James Stanley

--- Written by James Stanley, Strategist for DailyFX.com

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Contact and follow James on Twitter: @JStanleyFX


AUD/USD Technical Analysis: 15-Month Resistance Broken. Now What?

Fundamental analysis, economic and market themes

Connect via:

To receive Ilya's analysis directly via email, please SIGN UP HERE

Talking Points:

  • AUD/USD Technical Strategy: Flat
  • Aussie Dollar soars to break 15-month resistance vs. US counterpart
  • Betting on upside follow-through in the near term may be premature

The Australian Dollar soared past resistance capping gains since April 2016 against its US counterpart, hinting that a lasting trend reversal may be in progress. Explosive gains followed as Fed rate hike prospects fizzled after the failure of a US healthcare reform bill backed by the White House.

From here, a daily close above the 38.2% Fibonacci expansion at 0.7979 opens the door for a challenge of the 50% level at 0.8039. Alternatively, a reversal back below the 23.6% level at 0.7904 paves the way for a retest of the April 21 high at 0.7835, now recast as support.

While the magnitude of the move higher is certainly impressive, betting on lasting follow-through does not seem particularly attractive. Worrying economic news-flow raises a red flag as the spotlight turns to domestic affairs with the release of jobs data ahead. With that in mind, the sidelines seem most attractive.

Have a question about trading AUD/USD? Join a trading Q&A webinar and ask it live!

AUD/USD Technical Analysis: 15-Month Resistance Broken. Now What?

USD/CAD Plummets As BoC Does Not Look To Be ’One And Done’

Position Trading based on technical set ups, Risk Management & Trader Psychology.

Connect via:

What will happen to the USD as other central banks begin normalization? Click here to see our latest forecastsand find out what trades are developing in this new environment!

Highlights:

Ladies and gentlemen, you may have just witnessed your first hawkish hike of the post-great financial crisis (GFC) era. In short, a hawkish hike is one where the central bank warns the market that they’re hiking and not looking for additional ways to support the economy through the hiking cycle (as the Fed has done). On Wednesday, the Bank of Canada raised rates for the first time in seven years from 0.5% to 0.75%, and the market is now pricing in a hike in Q4 2017.

When parsing through Bank of Canada governor Stephen Poloz’s comments, the most hawkish appear to be their belief that the output gap (potential GDP – actual GDP) will be closed by the end of the year. Typically, central banks will engage in monetary policy easing in accordance to an output gap and tighten with potential GDP is less than actual GDP. The risk going into the BoC rate announcement was a dovish hike given that a pricing in of a hike was firm, but the BoC surprised, and the CAD has strengthened aggressively as USD/CAD moves lower (see chart below).

Now, all eyes will be on Oil. USD/CAD has fallen from 1.3793 by 7.3% to 1.27871, the 78.6% retracement of the May 2016 to 2017 high. If Oil ( a key export for Canada) can rise, the output gap would close faster, and an even more hawkish BoC could be in order. While Crude Oil has a lot of headwinds, a turning of that market could lead CAD to soon become the engine of the FX market. For traders looking for a reversal, the first trigger that one is unfolding would be a daily close above this week's high of 1.2945.

Either way, it’s safe to say that the darling of EMFX is MXN and the G10’s honor goes to Canada at the beginning of H2 2017. I think you would have come up empty in trying to find someone on November 9 (when Trump’s presidency was announced) that believed the USD would be a sandwich that is surrounded by the two strongest global currencies.

Recommended Reading:Crude Oil Price Forecast: Watch WTI Price Action Near This Zone

Join Tyler at his Daily Closing Bell webinars at 3 pm ETto discuss key market developments.

Weekly USD/CAD Chart: The breakdown continues as CAD remains strong like a Bull

USD/CAD Plummets As BoC Does Not Look To Be ‘One And Done’

Chart Created by Tyler Yell, CMT

USD/CAD Insight from IG Client Positioning: USD/CAD pullback may be in the works

The sentiment highlight section is designed to help you see how DailyFX utilizes the insights derived from IG Client Sentiment, and how client positioning can lead to trade ideas. If you have any questions on this indicator, you are welcome to reach out to the author of this article with questions at tyell@dailyfx.com.

USD/CAD Plummets As BoC Does Not Look To Be ‘One And Done’

USDCAD: Retail trader data shows 66.6% of traders are net-long with the ratio of traders long to short at 2.0 to 1. In fact, traders have remained net-long since Jun 07 when USDCAD traded near 1.3481; price has moved 4.9% lower since then. The number of traders net-long is 6.3% lower than yesterday and 11.1% lower from last week, while the number of traders net-short is 15.1% higher than yesterday and 19.1% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests USDCAD 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 USDCAD price trend may soon reverse higher despite the fact traders remain net-long.(Emphasis mine)

---

Written by Tyler Yell, CMT, Currency Analyst & Trading Instructor for DailyFX.com

To receive Tyler's analysis directly via email, please SIGN UP HERE

Contact and discuss markets with Tyler on Twitter: @ForexYell


NZD/USD Technical Analysis: 10-Month Resistance Under Fire

Fundamental analysis, economic and market themes

Connect via:

To receive Ilya's analysis directly via email, please SIGN UP HERE

Talking Points:

  • NZD/USD Technical Strategy: Flat
  • Kiwi Dollar poised to test 10-month high below 0.75 level vs. US cousin
  • Confirmation, improved risk/reward setting needed for actionable setup

The New Zealand continues to gain ground on its US cousin, with prices now poised to challenge resistance that has capped gains since September 2016. The currency’s resilience even in the face of disappointing economic data seemingly speaks to strong conviction behind the upside push.

Confirmation of a break above 0.7404 (November 8 high, 38.2% Fibonacci expansion) on a daily closing basis opens the door for a test of the 0.7466-84 area (50% level, September 2016 high). Alternatively, a reversal below resistance-turned-support at 0.7347 exposes the chart pivot level at 0.7259.

An actionable trading opportunity seems absent. Prices are testing resistance but a clear break is yet to be shown, making a long trade seem premature. The absence of a bearish reversal signal clearly argues against betting on the short side. On balance, the sidelines seem most attractive.

Need help with your NZD/USD strategy? See our trading guide!

NZD/USD Technical Analysis: 10-Month Resistance Under Fire

EUR/GBP Technical Analysis: Early Topping Signs Show Up

Fundamental analysis, economic and market themes

Connect via:

To receive Ilya's analysis directly via email, please SIGN UP HERE

Talking Points:

  • EUR/GBP Technical Strategy: Flat
  • Euro hits highest in almost 9 months, challenges potent resistance
  • RSI divergence, sentiment shift hint downside reversal may be brewing

The Euro has advanced to the highest level in nearly nine months against the British Pound but negative RSI divergence warns of ebbing upside momentum. A shift in speculative sentiment studies likewise hints that the tide may soon turn in favor of the downside.

Prices are perched at resistance marked by the 38.2% Fibonacci expansion and a rising channel top at 0.8984, with a daily close above that opening the door for a challenge of the 50% level at 0.9059. Alternatively, a reversal back below the 23.6% Fib at 0.8891 paves the way for a retest of the 14.6% expansion at 0.8834.

RSI- and sentiment-derived clues notwithstanding, the absence of a clear-cut bearish reversal signal suggests that taking up a short position is premature for now. That seems all the more prudent given the Euro’s defiance of a dovish ECB. Standing aside seems best for now.

What are the forces driving longer-term Euro and British Pound trends? Find out here!

EUR/GBP Technical Analysis: Early Topping Signs Show Up

EUR/JPY Technical Analysis: Blast-Off to Fresh 2017 Highs

Price Action, Swing & Short Term Trade Setups

Connect via:

To receive James Stanley’s Analysis directly via email, please sign up here.

Talking Points:

In our last article, we looked at a bullish setup in EUR/JPY after price action broke-above a bear flag formation that had built over the prior month. But even while that bear flag was showing a retracement of the ‘bigger picture’ bullish trend, buyers remained vigilant; not allowing prices to drop below the 38.2% Fibonacci retracement of the most recent major move.

4-Hour EUR/JPY with emphasis on yesterday’s Bullish Breakout

EUR/JPY Technical Analysis: Blast-Off to Fresh 2017 Highs

Chart prepared by James Stanley

Yesterday saw Mario Draghi offer comments regarding the ECB’s forward-looking outlook, and markets responded with an outsized gust of strength in the Euro; driving EUR/JPY up to a fresh yearly high of ¥127.86. Earlier this morning, reports began to circulate that ECB ‘sources’ indicated that Mr. Draghi’s speech yesterday was ‘misjudged’ to mean that the bank is getting closer to tightening policy when the intent was to be more balanced in nature. But regardless of the noise, the market reaction was telling as prices in EUR/JPY posed a quick dip after these comments began to circulate through the market, at which point buyers soundly pounced on the move to re-drive EUR/JPY right-back towards those prior highs.

The point where the bounce began is an area of interest, as this syncs with the April 2016 high in EUR/JPY. On the chart below, we’re looking at the April swing-high that helped to set intra-day support after this morning’s dip in EUR/JPY:

EUR/JPY Daily Chart with emphasis on April 2016 swing-high

EUR/JPY Technical Analysis: Blast-Off to Fresh 2017 Highs

Chart prepared by James Stanley

After this morning’s support test, buyers have quickly driven the pair back towards prior highs, and this highlights the potential for bullish continuation in the pair. The challenge at this point is one of entry, as prices remain rather elevated from nearby support levels after this recent run-higher, and a bit of resistance has begun to show on the hourly chart around the ¥127.86 swing-high.

On the chart below, we look at four different potential support levels above the prior swing-low of ¥124.71; and each of these could be usable for bullish re-entry. Key would be letting support actually show before triggering long. Alternatively, the possibility of bullish breakout entry logic is available, using this morning’s high of ¥127.86, with targets set towards resistance at ¥128.52.

EUR/JPY 30M Chart with Potential Support Levels Applied

EUR/JPY Technical Analysis: Blast-Off to Fresh 2017 Highs

Chart prepared by James Stanley

--- Written by James Stanley, Strategist for DailyFX.com

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Contact and follow James on Twitter: @JStanleyFX


GBP/JPY Technical Analysis: May’s Support is Now Resistance

Price Action, Swing & Short Term Trade Setups

Connect via:

To receive James Stanley’s Analysis directly via email, please sign up here.

Talking Points:

In our last article, we looked at GBP/JPY as a bearish channel found support around the vaulted psychological level of ¥140.00. But as we shared, given the backdrop of another round of U.K. elections that seemingly made the context around upcoming Brexit negotiations even more-cloudy, traders would likely want to retain somewhat of a down-side bias. We had also looked at the key zone of prior support and potential resistance at the ¥141.59 level, which is the 50% retracement of the ‘Brexit move’ in GBP/JPY. On the weekly chart below, we’re looking at this set of retracement levels with emphasis on the half-way point of ¥141.59.

GBP/JPY Technical Analysis: May's Support is Now Resistance

Chart prepared by James Stanley

Since GBP/JPY topped-out in mid-April, sellers have been rather active as the pair has driven-lower by more than 900 pips. There has been quite a bit of headline drama to accompany this situation, as the weakness created from the most recent round of U.K. elections was at least partially offset by a rather hawkish BoE outlay last week. But as we warned, that ‘hawkish’ theme at the BoE was likely transitory in nature; and just yesterday we saw comments from Mark Carney that had essentially ruled out the prospect of a near-term rate hike. This drove GBP/JPY back below the descending trend-line.

This morning produced a peculiar scenario in which the Chief Economist of the Bank of England, Andy Haldane, said that he may be voting for a rate hike in the second half of the year. This speaks to the hawkish tonality from the BoE last week, and this also appears to run contrary to what Mr. Carney had said just yesterday. The net impact of this morning’s comments from Mr. Haldane was a brief run of strength in Sterling; and in GBP/JPY, this brought prices up to resistance at our familiar level of 141.59.

GBP/JPY Technical Analysis: May's Support is Now Resistance

Chart prepared by James Stanley

This can open the door to bearish continuation in GBP/JPY, given one caveat: Traders would need to be comfortable carrying long-Yen exposure or else, they may be able to better-direct those bearish Sterling strategies elsewhere, such as GBP/USD or EUR/GBP. Given that we’ve seen a rather consistent string of Yen-losses after last week’s BoJ meeting, we could be looking at a scenario in which both GBP and JPY lose value; making the prospect of a short position in GBP/JPY rather challenging.

However, for those that are looking to take on long-Yen exposure, short positions could be sought with stops set above today’s swing-high of 141.77 and targets directed to 139.50 and then the prior swing-low of 138.65. For those that would like a bit more room to work, the prior batch of swing-resistance around 142.50 could also be used for stop placement, as well.

GBP/JPY Technical Analysis: May's Support is Now Resistance

Chart prepared by James Stanley

--- Written by James Stanley, Strategist for DailyFX.com

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Contact and follow James on Twitter: @JStanleyFX


USD/CNH Technical Analysis: 6.8 in Sight Ahead of US 3Q GDP


Talking Points:

- Pair keeps pushing higher after breaking resistance at the January 7 top around 6.7584

- 6.8 handle now within touching distance as we approach US 3Q GDP numbers

- Pullback to support might initiate further buying

If you’re looking for trading ideas, check out our Trading Guides Here

The US Dollar keeps printing fresh record highs versus the Chinese Yuan in offshore trade, as the pair now sits within touching distance from what might prove to be an important resistance level at the 6.8 handle.

The pair surged higher after breaking resistance around the 6.7 handle followed by the 2016 January high around 6.7584.

Indeed, momentum still looks strong as we head into today’s key US 3Q GDP numbers, which could prove influential for the pair’s direction in the near term.

As it were, price is now sitting in close proximity to the 6.8 handle, and a break higher seems an important milestone for further gains.

If the pair reverses course, downside moves might still be interpreted as corrective as long as buyers can keep price above the 6.7 level.

The next major resistance levels seem to be the 6.8 handle, and 6.8500 while potential levels of support could be 6.7584 followed by the area below 6.7400 and the 6.7 handle.

USD/CNH Daily Chart: October 28, 2016

USD/CNH Technical Analysis: 6.8 in Sight Ahead of US 3Q GDP

--- Written by Oded Shimoni, Junior Currency Analyst for DailyFX.com

To contact Oded Shimoni, e-mail oshimoni@dailyfx.com

Follow him on Twitter at @OdedShimoni


CAC 40 Breaks Range


Talking Points:

The CAC 40 has broken decisively lower this morning, with the Index trading down -1.31% so far for Thursday’s trading. This breakout concludes an extend range that the pair has been developing from May the 17th. Of the 40 listed CAC 40 stocks, only Vivendi is trading higher for the session (+0.30%). Top Losers for today’s trading include both Cap Gemini (-2.33) and Airbus (-2.05%).

Technically, with this morning’s breakout, the CAC 40 is again trending lower in the short term. The Index remains trading below its 10 day EMA (exponential moving average), which is found at 5,261.45. If prices continue to slide, traders may next look for support near the April 25th low at 5,158.50. In the event that the CAC 40 rebounds from today’s lows, traders should look for prices to trade back above the previously mentioned 10 day EMA. A bullish move of this nature would open the CAC 40 to potentially challenge the previous range high near 5,375.50.

CAC 40, Daily Chart with Averages

CAC 40 Breaks Range

(Created Using IG Charts)

Want to learn more about trading with market sentiment? Get our Free guide here.

Sentiment totals for the CAC 40 remain net-long for Thursday. Currently IG Client Sentiment reads at +1.58 with 61.2% of traders net-long the Index. As this value remains slightly positive, it may be seen as interpreted as a bearish signal for the CAC 40. In the event that the CAC 40 continues to breakout lower, traders should watch sentiment to push up towards negative extremes of +2.0 or more. Alternatively if prices reverse and rally higher, sentiment totals may reverse and eventually flip negative.

CAC 40 Breaks Range

--- 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.


US Dollar To 13-Month Low, Oil Price Suffers on Rising OPEC Supply

Position Trading based on technical set ups, Risk Management & Trader Psychology.

Connect via:

Highlights:

  • Fed may add to DXY losses on Wednesday announcement, HFs hold biggest net short in 4 Yrs
  • AUD/USD removed from top spot after RBA’s Debelle says neutral rate not predictive
  • EUR approaches 1.17 with the wind in its sails
  • Oil weakness persists on reports that supply from OPEC is above production curb agreement
  • Sentiment Highlight: EUR/GBP may be loading up for a move higher

2017 is a great year for risk as it seems equity traders see no need for a sell button, but the same can’t be said for the USD. Developed market FX has been having a field day with USD over the session and today’s drop brings the total loss for 2017 for the DXY to 10%. The key technical support many are now watching is the 2016 low near 92. Much of the weakness due to the 57.6% weighting of the EUR in the DXY is the impressive EUR strength. Whatever the reason, the pressure is likely to remain. Per the CFTC, institutional speculators (hedge funds) are holding their largest net short position in the Dollar Index since 2013 before the Taper Tantrum erupted and Bernanke put the pacifier back in the market’s mouth.

One way that many traders were playing USD weakness was via the AUD, which was trading at 2-year highs earlier in the week. On Friday morning, RBA’s Guy Debelle took some enthusiasm out of the trade by saying the revelation in the RBA minutes this week that the neutral rate has shifted higher is not predictive of a future rate increase. On that announcement, AU sovereign bonds went bid falling ~4%, and the AUD was sold across the board. However, looking at the macro picture, risk-on currencies like the commodity bloc and EMFX still appear a favorable way to play USD weakness.

Outlier strength in the FX market can be infectious, and that’s how it feels for EUR at the moment. As EUR/USD looks set to test 1.17, and approach the 2015 high of 1.1714, EUR bullishness is showing up across the map. The political picture in Europe is the least concerning of the G4 (US, JP, UK, & EU) at the moment as inflation is picking up the pace, though still too low to remove accommodation for the ECB.

Looking across G4 pairs, EUR/GBP continues to look favorable to the upside when comparing positioning, options, and the uncertainty in the economy for the UK. Thursday showed two central banks in the ECB and BoJ that could not have been further apart in how they plan to conduct monetary policy over the coming year, which is bullish EUR/JPY. Finally, in a similar mess that GBP finds itself in, the political risk premium is also being applied to USD with its own slate of weak data, which opens up the possibility of a less-hawkish Fed moving forward that could keep EUR/USD pushing higher yet.

Are you looking for trading ideas? Our Q3 forecasts are fresh and ready to light your path. Click here to access for FREE.

On Friday morning, a discouraging report from Petro-Logistics showed OPEC output appears set to rise above the levels agreed upon in the agreement. The report showed OPEC output is likely to be above 33m barrels per day July, which is higher than the agreed upon group target of 32.5m barrels that was agreed upon when they agreed to extend the production cap in May. When looking at the chart below, you can see that another lower-high may be in store, which would be a favorable environment for a trend continuation lower.

JoinTylerin hisDaily Closing Bell webinars at 3 pm ETto discusstradeable market developments.

FX Closing Bell Top Chart: July 21, Oil loses ground at key resistance

US Dollar To 13-Month Low, Oil Price Suffers on Rising OPEC Supply

Chart Created by Tyler Yell, CMT

Next Week's Main Event:USD Federal Open Market Committee Rate Decision (Jul 26)

IG Client Sentiment Highlight:EUR/GBP may be loading up for a move higher

The sentiment highlight section is designed to help you see how DailyFX utilizes the insights derived from IG Client Sentiment, and how client positioning can lead to trade ideas. If you have any questions on this indicator, you are welcome to reach out to the author of this article with questions at tyell@dailyfx.com.

US Dollar To 13-Month Low, Oil Price Suffers on Rising OPEC Supply

---

Written by Tyler Yell, CMT, Currency Analyst & Trading Instructor for DailyFX.com

To receive Tyler's analysis directly via email, please SIGN UP HERE

Contact and discuss markets with Tyler on Twitter: @ForexYell


USD Drops On Further Inflation Doubt As Trump Hope Wanes on Healthcare

Position Trading based on technical set ups, Risk Management & Trader Psychology.

Connect via:

What will save the USD from its 2017 downtrend? Get a free DFX Q3 market forecast here

Key Takeaways:

  • DXY Technical Strategy: DXY remains in “sell the rips” mode below 96.50
  • DXY polarity point of 96.50 remains technical line in the sand, bearish below
  • Dollar weakness picks up pace as EUR breaks to fresh 14-month highs

The dollar bear market has picked up the pace today on news that Senate majority leader Mitch McConnell would withdraw the vote for the repeal of Obamacare only to show that the ‘Supermajority’ was great in theory, yet poor in practice. Unfortunately, coming into the year, the US was supposed to be a harbinger for fiscal lead inflation a la China, but the paring back of the Trumpflation trade continues.

As we heard last week from Janet Yellen when she testified to Congress, inflation already is a puzzle, which caused the fixed income market to price in a little more than one hike in 2018 despite the Fed looking to hike three times. When looking at the long-term chart (see below), the market is curbing its enthusiasm that began in July 2014 when the Fed had credibly signaled that normalization was coming.

From July 2014 to early 2017, the DXY rose ~30% in anticipation of the great divide in monetary policy. However, we now see that economic strength and data surprises are not ‘Made in the USA,' but rather in other economies like the Eurozone, Canada, and China. The lack of US growth could mean that the Fed will no longer be the leading central bank in terms of normalization, but possible honing a mea culpa of normalizing too much too soon.

When looking at the chart, you can see that the Dollar is traveling comfortable in a bearish channel and is working to test an internal Trendline drawn from the 2012 peak and the 2016 low. A break below the internal Trendline on a weekly basis would open up the increasing probability of a move to the 38.2% retracement (labeled long-term support) that aligns with the 2016 low at 92.13. Only a daily close above 95.50 would neutralize the current bearish positioning. However, as the blows to hope keep coming for US inflation (despite base metals rallying), I won’t hold my breath in anticipation that the weak USD finds life.

Traders who trade individual pairs are watching to see if EUR/USD can trade to the 2016 high of 1.1616 and the 100-DMA on USD/JPY at 111.78.

If you would be interested in seeing how retail tradersare bettingin key markets, see IG Client Sentiment here!

Join Tyler in his Daily Closing Bell webinars at 3 pm ET to discuss this market.

DXY below 96.50 keeps thefocus on downside extension targets @ 92.13, EUR/USD @ 1.16

USD Drops On Further Inflation Doubt As Trump Hope Wanes on Healthcare

Chart Created by Tyler Yell, CMT

IG Client Sentiment Highlight: EUR (57.6% of DXY) Sentiment favors further DXY downside

USD Drops On Further Inflation Doubt As Trump Hope Wanes on Healthcare

EURUSD: Retail trader data shows 28.1% of traders are net-long with the ratio of traders short to long at 2.56 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.06683; theprice has moved 8.6% higher since then. The number of traders net-long is 1.4% higher than yesterday and 2.2% higher from last week, while the number of traders net-short is 0.8% lower than yesterday and 5.9% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current EURUSD price trend may soon reverse lower despite the fact traders remain net-short. (Emphasis mine)

---

Written by Tyler Yell, CMT, Currency Analyst & Trading Instructor for DailyFX.com

To receive Tyler's analysis directly via email, please SIGN UP HERE

Contact and discuss markets with Tyler on Twitter: @ForexYell


Silver Price Action Yet to Confirm End of Bounce, but Soon Could

Price behavior analysis, short to intermediate-term trade set-ups.

Connect via:

What’s inside:

  • Silver price action has not confirmed the end of the correction
  • There are levels which could see silver stall, watch price action around them
  • 2003 trend-line viewed as major target

What important factors are expected to impact Precious Metals in Q3? Find out here!

Precious metals continue to bounce with the help of a very weak US dollar, but looking at silver price action the feeling on this end is that it’s still corrective in nature and that we have yet to see the worst levels before a meaningful low can form. Lower lows (LL) and lower highs (LH) are still very clear.

We were looking at a confluence of horizontal and trend-line resistance as a potential capper on the bounce, but the market wasn’t showing a bearish response. Price action at levels is key – does the market respond to it or not? That is, does momentum turn once a certain level is met. So far, we have not seen that happen, and so while the current rally appears to be a counter-trend move which will dissipate and turn lower, we need to wait for price action to tell us when that time may have arrived. (Price action at price levels is a facet to my analysis discussed routinely in webinars.)

What’s a potential road-blocker now? The lowest closing prints from last month are currently being tested around the 16.40 mark. A turn lower from here or even a drive higher through resistance and failure to hold above on a daily closing basis (forming a key reversal bar) would constitute the price action we are looking for. If, however, silver continues to travel higher we may have to wait for the bounce to fizzle out at the trend-line running down off the April high, which could come into confluence with a swing high created towards the very end of last month.

In either event, should we see silver turn lower we are still targeting the 2003 trend-line near the 14.85 mark. It’s at that point we might be in for a very sizable rally. For now, though, we’ll continue to focus on finding a spot to join the broader trend lower.

Silver futures: Daily

Silver Price Action Yet to Confirm End of Bounce, but Soon Could

Paul conducts webinars every week from Tuesday-Friday. See the Webinar Calendar for details, and the full line-up of all upcoming live events.

---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.


US Dollar: Chasing A Bounce Could Be Expensive Below Election Gap

Position Trading based on technical set ups, Risk Management & Trader Psychology.

Connect via:

Will Dollar weakness persist for the rest of 2017? Get a free DFX market forecast here

Talking Points:

  • DXY Technical Strategy: DXY remains in “sell the rips” mode below 98.20 (French Election gap)
  • DXY remains at the mercy of whether the EUR will rip or flip
  • EUR strength expected to continue per sentiment making DXY gains tough to come by

Dollar Bulls have come out from hiding in the last week on a relief rally that has the Federal Reserve to thank. While discussing the likelihood of Balance Sheet run-off in 2017, the Federal Reserve also said that another rate hike was expected this year followed by three more in 2018. Currently, when looking at Fed Funds futures contracts, the probability is weighted to a hold in September with announcements on Balance Sheet run-off, which is presumed to be USD-positive, and a rate hike in December if warranted by a turnaround in the data. If we had to label the conversations from recent Fed Presidents following the announced rate hike, I would apply the term, very cautious optimism. The Fed does have the benefit of hiking during the easiest money conditions per the Federal Reserve Bank of Chicago Financial Conditions Index since 2014, which is before they began hiking. However, the Citi Economic Surprise Index for the US Economy is rebounding from the weakest levels in six years. Economic surprise indices are subject to wildly optimistic or pessimistic expectations from economists, but they are telling none the less.

Another development in the market worth watching that likely has implications for the Fed, and the Dollar is the flattening US yield curve. Recently, the US5/30 Yield Curve where one would sell the 5-year UST and buy the 30-year UST had seen the spread reduce or flatten to the lowest level since December 2007, when the US Economy was entering into a recession that would eventually lead to the credit crisis of 2008.

Traders should note that as the yield curve flattens, it tends to mark speculative excesses and not the immediate pain that typically arises from yield curve inversion that many associate with recession. While the curve obviously needs to flatten before it can invert, to try to get in front of the trade, could lead to a painful outcome.

If you would be interested in seeing how retail tradersare bettingin key markets, see IG Client Sentiment here!

Join Tyler in his Daily Closing Bell webinars at 3 pm ET to discuss this market.

DXY trading below 98.20 keeps focus on downside extension targets @ 95.85-94.83

US Dollar: Chasing A Bounce Could Be Expensive Below Election Gap

Chart Created by Tyler Yell, CMT

IG Client Sentiment Highlight: EUR (57.6% of DXY) Sentiment favors further DXY downside

US Dollar: Chasing A Bounce Could Be Expensive Below Election Gap

EURUSD: Retail trader data shows 30.9% of traders are net-long with the ratio of traders short to long at 2.24 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.05975; price has moved 5.3% higher since then. The number of traders net-long is 1.4% lower than yesterday and 7.1% lower from last week, while the number of traders net-short is 2.2% lower than yesterday and 3.4% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Positioning is less net-short than yesterday but more net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EURUSD trading bias. (Emphasis mine)

---

Written by Tyler Yell, CMT, Currency Analyst & Trading Instructor for DailyFX.com

To receive Tyler's analysis directly via email, please SIGN UP HERE

Contact and discuss markets with Tyler on Twitter: @ForexYell


S&P 500 Technical Outlook: Dip-buyers Left Waiting

Price behavior analysis, short to intermediate-term trade set-ups.

Connect via:

What’s inside:

  • S&P 500 trading to new record levels, breaks through one line of resistance
  • Another eyed lined of resistance lies ahead, only viewed as minor in significance
  • Pullback entries may be short and shallow; must be nimble

What big factors are expected to impact the S&P 500 during Q3? Find out here!

The other day we were discussing the move to new record highs in the S&P 500 and the preferred approach of not paying up, instead choosing to wait for a pullback first. Between the Friday breakout and now the market didn't experience much of a pullback, actually on a closing basis there has been no decline at all, just a pair of new record closes. On an intra-day basis, though, Tuesday saw the market try and dip back below the prior all-time high recorded in June, but by days end the market recovered back above. It was a shallow ‘no dip, dip’.

Yesterday’s move higher showed not only good buying interest, but was also enough to push the S&P beyond the first line of resistance we had marked in by way of the March top-side trend-line. No issues at all pushing on through. We’ll look to see how the market responds to it on any dip which may unfold from here. The move higher now brings the underside of the November slope into play. As stated the other day, both of these overhead lines given they are running with the direction of the prevailing trend, are not viewed as the most steadfast forms of resistance. But potential resistance, nevertheless. With that said, if the market is ready to launch higher in a similar fashion as it did during February we may see the S&P tear through the November slope with relative ease.

But again, to reiterate, not a big fan on this end of paying up into momentum; choosing, rather, to buy on dips. This means those traders looking to get long may have to be nimble and establish positions on intra-day dips and single-day declines (Keep in mind the March top-side trend-line as first potential support.) Overall, risk reward at this moment is not the most compelling.

S&P 500: Daily

S&P 500 Technical Outlook: Dip-buyers Left Waiting

Paul conducts webinars every week from Tuesday-Friday. See the Webinar Calendar for details, and the full line-up of all upcoming live events.

---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.


DAX Trading Towards Gap-fill, Break of H&S Neckline

Price behavior analysis, short to intermediate-term trade set-ups.

Connect via:

What’s inside:

  • Post-ECB drop accelerates Friday, gap-fill likely
  • H&S top to trigger on a move much lower from here
  • Will require strong bullish price action to negate current bearish bias

What major factors are expected to impact the DAX & Euro in Q3? Find out here!

To end last week, we were noting DAX weakness post-ECB with the help of the euro continuing to bulldoze its way higher. The euro has been weighing on European stocks, but sharp event-driven moves really highlight this inverse relationship. The Thursday intra-day drop turned into a material down-day on Friday, which pushed the German index into the gap created following the first round of the French elections. We’re very near triggering the H&S topping formation, too, with price thus far today trading below the neckline. It’s all about the daily closing print below, though, to avoid fake-outs. A close below the neckline, whether today or a couple of days from now, is a likely scenario with the DAX still sitting over 150 points away from filling the gap.

The gap-fill is the first form of support, and below there the next level of price support comes in around 11941, the April low. The March low at 11850 could be of minor significance, but we’ll be placing more emphasis on the 200-day which currently clocks in just over 11800. Turning to the ‘textbook’ way of deriving the target once an H&S pattern triggers, the ‘measured move target’ clocks in at around 11645. It’s simply calculated as the distance from the head to the neckline subtracted from the point where price breaks the neckline.

What would take the bearish scenario off the table? First-off, given the DAX is trading in a major gap, to reiterate, probability favors this air pocket getting filled before finding any real support. In that case, as stated earlier, the neckline will have been broken and we’ll have our topping formation confirmed and down-move well underway. If the move lower is to be cut short we’ll need to see bullish price action at one of the beforementioned support levels. A big reversal and follow-through to the top-side will need to develop. If the DAX were to not fill the gap and hold right around current levels, we would still need to see a strong shove higher which negates the bearish trend in place since the peak in June.

DAX: Daily

DAX Trading Towards Gap-fill, Break of H&S Neckline

Paul conducts webinars every week from Tuesday-Friday. See the Webinar Calendar for details, and the full line-up of all upcoming live events.

---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.


ASX 200 Technical Analysis: Nasty Daily Chart Just Got Gloomier

Financial markets, economics, journalism and fundamental analysis.

Connect via:

Talking Points:

  • The ASX 200’s charts look ugly. The downtrend from May 1’s peak is very much in place
  • A clear, pennant pattern suggests more falls ahead
  • However, there are small flashes of light which bear watching

Get live, interactive coverage of all major Asia/Pacific economic data at the DailyFX Webinars

The ASX 200’s daily chart looks pretty horrible right now.

The gloomy series of lower highs just keeps coming as it has done since the Australian equity benchmark topped out for the year on May 1. Another seems to have been confirmed just this week by the bulls’ failure to push on from Monday’s highs.

ASX 200 Technical Analysis: Nasty Daily Chart Just Got Gloomier

And if that chart isn’t enough to make your bullish heart sink, well, there’s more bad news. Take a look at this horribly persistent pennant formation:

ASX 200 Technical Analysis: Nasty Daily Chart Just Got Gloomier

That’s a nasty little run of converging trendlines, usually viewed as a “consolidation pattern.” What it means is that, once it breaks (and we’d be justified in adding “if it ever does” in this case), then the index will return to the trend in place before it formed. In this case that would inevitably mean further falls.

Well, so far so gloomy. But is there any cause for hope here? Well, it must be admitted, not much. There is however some chance that the 20-day moving average could be about to pop above the 50-day.

ASX 200 Technical Analysis: Nasty Daily Chart Just Got Gloomier

This could be at least a modestly bullish short-term signal and, moreover, it seems that all the ASX’s moving averages are in less steep downtrends. For the moment, this is “less-bad” rather than “good” news but still, it’s something. Also, if we home in on the index a little more tightly, we see that it is flirting with support levels which have held back bearish forays since the end of June.

ASX 200 Technical Analysis: Nasty Daily Chart Just Got Gloomier

The bottom line is that the ASX’s downtrend endures, but there may be some prospect that these levels are forming a near-term base. They certainly bear watching.

--- Written by David Cottle, DailyFX Research

Contact and follow David on Twitter:@DavidCottleFX


Nikkei 225 Technical Analysis: Little Sign Of Altitude Sickness

Financial markets, economics, journalism and fundamental analysis.

Connect via:

Talking Points:

  • The Nikkei 225 has been around, or above 20,000 since early June
  • There’s been little impetus to push on, but not much selling pressure either
  • Does something have to give?

Where’s your favourite asset headed in the third quarter? Check out the DailyFX technical and fundamental analysis

If you’re going to get stuck, then there are worse places to do it.

The Nikkei 225 is certainly struggling to make progress to the upside and has done so since the start of June. However, the index remains close to its highs for 2017 and indeed, peaks not seen since the fall of 2015. Moreover, it is looking rather comfortable around the psychologically important 20,000 level, where it has loitered for about six weeks.

Nikkei 225 Technical Analysis: Little Sign Of Altitude Sickness

Of course, this comfort has limits. For the optimist, it’s clear that there was no great knee-jerk urge to sell the index on arrival at 20,000. Investors are clearly happy to be long, even up here. The pessimist might note that it’s been a very long time indeed since the Nikkei offered investors enduring, consistent upside at these levels. The last notable foray – in early 2015 – was measured in mere months and offered little more than 1,000 points of upside beyond 20,000.

Now, with momentum indicators such as the Relative Strength Index still noncommittal and certainly not suggesting overbuying, we’ll have to rely on crumbs of recent trading information to try and gauge likely future moves. One bit of possibly-good news is that the index’s range base seems to have moved measurably higher, as I suspected it was doing last week.

The old base around 19500 and predicated on May’s trade seems to have been replaced quite convincingly by support in the 19800 area from Mid-June.

Nikkei 225 Technical Analysis: Little Sign Of Altitude Sickness

While these levels hold it seems doubtful that investors need fear more significant near-term slippage.

However, it will pay to keep an eye on the simple moving averages too. They’re all sloping reassuringly upward still, but the 20-day variant is flattening out and may be on course to converge or even cross below the 50-day. Traditionalists would see this as a bearish sign and, whatever your view, this might well be something to watch in the absence of other, clearer leads.

Nikkei 225 Technical Analysis: Little Sign Of Altitude Sickness

--- Written by David Cottle, DailyFX Research

Contact and follow David on Twitter: @DavidCottleFX


FTSE 100 Trying to Break Yet Another Range and Trade in Open Space

Price behavior analysis, short to intermediate-term trade set-ups.

Connect via:

What’s inside:

  • FTSE 100 trying to push out of second range created over past three weeks
  • A solid rally out of the second range would be above important confluence of resistance
  • If it fails, then more of the same with a downward bias

How is ‘Brexit’ expected to impact the FTSE 100 and British Pound during Q3? Find out here!

When we looked at the FTSE 100 last week it was on the verge of breaking a painful trading range lasting nearly two weeks. What came next? Another painful trading range lasting a week. Certainly not the most ideal trading conditions, but now that the footsie is on the move beyond important technical thresholds there might be some hope for better directional price action.

Coming out of the first range on June 12 the market ran aground by trading into a top-side trend-line extending from the 2013 high over the 2015 high and then over and under several short and intermediate-term swing points since early January. There is the underside of the June/’Brexit’ trend-line in confluence as well. The inability to climb through this crossroad kicked off the beginning of the second range which today we are seeing the market try and break free of.

We could of course see an intra-day reversal and close near unchanged or lower on the session, and in this case, it would be considered a failure to maintain above an intersection of key resistance. If this happens, a key reversal bar could etch itself out and more choppy trading conditions with the possibility of a downward bias look likely to prevail.

But if today’s rally can hold as is or even further the FTSE towards higher levels, the index will be breaking out into open space as no real significant hurdles lie ahead until near record high levels.

FTSE 100: Daily

FTSE 100 Trying to Break Yet Another Range and Trade in Open Space

Paul conducts webinars every week from Tuesday-Friday. See the Webinar Calendar for details, and the full line-up of all upcoming live events.

---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.