AUD/USD Technical Analysis: Down Move Gaining Traction...

To receive Ilya’s analysis directly via email, please SIGN UP HERE Talking Points: AUD/USD Technical Strategy: Short at 0.7970 Aussie Dollar breaks secondary trend support, hinting at further weakness Short trade triggered, aiming for a decline toward 0.78 versus the US Dollar The Australian Dollar has fallen to the lowest level in a month against its US counterpart, with a breach of trend line support hinting at further losses ahead. Preliminary topping was noted last week but a secondary support break appeared to be needed for confirmation. It now looks to have transpired. The next major layer of support lines up in the 0.7808-19 area (August 15 low, 38.2% Fibonacci retracement), with a daily close below that opening the door for a test of the 50% level at 0.7725. Alternatively, push back above trend line support-turned-resistance – now at 0.7979 – exposes the July 27 high at 0.8066 anew. Risk/reward considerations appeared acceptable to attempt a short trade and AUD/USD was sold at 0.7970, initially targeting 0.7819. A stop-loss will be activated on a daily close above 0.8051. Profit on half of the position willArticle source:...

DAX Losing Steam, but Still Constructive; CAC In Need of a Pullback...

What’s inside: DAX sees limited reaction to expected election outcome German benchmark losing steam but still remains constructive CAC is on the extended side, it could use a rest before attempting to trade higher Struggling to gain momentum in your trading? Check out this beginner’s guide – Building Confidence in Trading Over the weekend, Chancellor Angela Merkel was re-elected, but her party alliance (CDU/CSU) experienced its worst result since elections began in 1949. However, the outcome sparked very limited volatility given it was within expectations. It was indeed a quiet period on the headline-front leading up to the election. This morning, the market started off with a small gap lower but has seen back-and-forth trading since. The initial push through major resistance surrounding 12300 was a powerful one earlier this month, but since then we’ve seen choppy price action with a slight upward bias. The DAX is losing steam, but remains constructive within a channel as long as we don’t see a sharp break lower. A breakout above Friday’s high at 12646 will quickly bring in the July high at 12676. If the German benchmark can get into gear above theArticle source:...

COT: British Pound Short Position Shrinks at Furious Pace...

What’s inside: Large speculators net-short position in the British pound was reduced by record amount Euro net selling for a second straight week despite range, to continue if support breaks Futures positioning profile charts for major currencies markets Confidence in trading is paramount, check out this guide – Building Confidence in Trading Every Friday the CFTC releases the Commitment of Traders (COT) report, which shows traders’ positioning in the futures market as it stands for the week ending on Tuesday. Displayed in the table below are the net positions of large speculators (i.e. hedge funds, CTAs, etc.); the change in their positioning from the prior week and where the net position stands relative to its 52-week range. Noteworthy developments British pound – With the recent surge in sterling there has been a massive change in the net-short position held by large speculators – the largest on record. The nearly 36k contracts purchased brought their net-short position to its smallest level since they flipped from long to short back in November 2015. While still short just over 10k contractsArticle source:...

Dollar Index Fails to Show Definitive Reversal Signs Ahead of FOMC...

Talking Points: DXY Technical Strategy: DXY remains in “sell the rips” mode below 94.08 DXY appears to be bouncing off an extreme downside target, may be subject to month-end flows Fed Funds Future bets take the probability of a Fed hike in 2017 down to 1/3 IG Client Sentiment Highlight: EUR/USD (57.6% of DXY) sentiment favors further push higher The Dollar Index has pushed off the lows for 2017 that wastraded at earlier in the month at 91.01. The technical level of focus that traders should keep in their sights is the March 2009 high of 89.62. The 89.62 level markets the March 2009 high (seen on the weekly chart below. A break below this level would open up the breakdown/ overlap of prior price patterns. From a price structure view, an overlap tends to indicate lack of long-term upside. A hold of support at 89.62 would favor the view that we could still be within a multi-year DXY bull market. A break below 89.62 would make the argument that weArticle source:...

EURUSD Weekly Technical Analysis: Resolution of Range on Its Way...

What’s inside: EURUSD remains unable to cross above the 2012 low, but… It’s got strong supported by way of the April trend-line, 11825 A resolution of the range should soon be upon us, waiting on confirmed break Confidence is essential to successful trading, see this new guide – ‘Building Confidence in Trading’. Coming into last week we said, “It’s quite possible we are in for a tug of war this coming week between bottom and top side levels before making a clean directional move. The reaction to the FOMC meeting on Wednesday may dictate which way the euro heads for the foreseeable future.” That was indeed the case for the week in terms of ‘tug-of-war’ as both top and bottom-side levels proved even further to be formidable to both sides of the market. The reaction to a directly hawkish Fed came just as the euro had been edging higher along the underside of a trend-line on the 4-hr chart. The sharp move lower quickly found support on the April trend-line where a bounce ensued on the two days to conclude the week where the euro ended up closing unchanged Friday. SomethingArticle source:...

Australian Dollar Outlook Turning Bullish Again...

Why and how do we use IG Client Sentiment in trading? See our guide and real-time data. AUDUSD: Retail trader data shows 31.4% of traders are net-long with the ratio of traders short to long at 2.19 to 1. In fact, traders have remained net-short since Jun 04 when AUDUSD traded near 0.74542; price has moved 7.3% higher since then. The percentage of traders net-long is now its lowest since Sep 11 when AUDUSD traded near 0.80307. The number of traders net-long is 13.4% lower than yesterday and 7.8% lower from last week, while the number of traders net-short is 11.3% higher than yesterday and 5.7% higher from last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests AUDUSD prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger AUDUSD-bullish contrarian trading bias. — Written by Christopher Vecchio, CFA, Senior Currency Strategist To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com Follow him on Twitter at @CVecchioFX To beArticle source:...