Analyst Articles – Forex News 24

Dow Jones, S&P 500, DAX 30, and FTSE 100Technical Forecast
EUR/USD Attracts Bears, But Price Momentum May Reverse Higher
US Dollar Looks to Earnings, Economic Data to Shape Growth Bets

Dow Jones, S&P 500, DAX 30, and FTSE 100Technical Forecast

Posted: 14 Apr 2019 03:28 AM PDT

Dow Jones, S&P 500, DAX 30, and FTSE 100Technical Forecast:

The S&P 500 and Dow Jones tread water above nearby resistance as bulls set their sight on new all-time highs
The DAX 30 finds itself comfortably within its upward channel from January
The FTSE 100 rests narrowly beneath resistance from mid-February

Dow Jones Technical Forecast: Bullish

The Dow Jones gapped higher on Friday as a notable component of the Industrial Average – Disney – soared to all-time highs. With a daily close above the recent band of resistance at 26,295, the index should now look to use the level as support. Beneath that lies a support trendline from October that recently acted as the topside of a wedge from February to its break on April 1.

Learn the differences between the Dow Jones and S&P 500 and how they might contribute to different outlooks.

With considerable support beneath the index, the topside shows promise. Apart from the swing high on April 5 at 26,490, immediate resistance is less clear. That said, 26,773 – September's high – should offer some resistance before the Average tests record highs at 26,942.

Dow Jones Price Chart: 4-Hour Time Frame (January 2019 to April 2019) (Chart 1)

How to day-trade the Dow Jones

S&P 500 Technical Forecast: Bullish

Similarly, the S&P 500 gapped higher at Friday's open on positive earnings from JP Morgan, Wells Fargo and PNC Bank. In turn, the index ran to topside a resistance trendline dating to December 24. Price action has been wrapping around the line like a vine, suggesting it still holds some sway. It will pose the first top-side barrier for a move higher in the week ahead.

Beyond that, horizontal resistance at 2,916 – September's high – is another risk to a move higher. Should both topside levels be beaten, the final hurdle is the index's record high at 2,942. As far as support is concerned, the S&P 500 has ample. Prior resistance at 2,870 from the high in February 2018 should now offer buoyancy on an attempted move lower, followed by March's high at 2,860.

S&P 500 Price Chart: 4 – Hour Time Frame (January 2019 – April 2019) (Chart 2)

DAX 30 Technical Forecast: Neutral

The German DAX 30 finds itself on the topside of its upward channel from January. Given the positioning of the index within its channel, and its stellar run-up two weeks ago, consolidation or a minor retracement may be needed before another topside test is attempted.

The channel's upper bound appears to be the sole resistance, with the index's current price marking the high during a period of consolidation amidst October's rout. Should the index open above 12,000 on Monday, the level could offer some buoyancy during the week. 11,841 marks another October high and lies in an open gap from two weeks ago. In the week ahead, it should provide some support if it is tested before the lower-bound of the channel.

DAX 30 Price Chart: 4 – Hour Time Frame (December 2018 – March 2019) (Chart 3)

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FTSE 100 Technical Forecast:Neutral

The FTSE 100 closed Friday's session slightly beneath trendline resistance from mid-February. Although the line has been broken in prior sessions, it provided clear-cut resistance during Thursday and Friday trading which suggests it should continue to do so next week. It will be the first barrier to a topside move.

For support, the index will rely on the 61.8% Fib level at 7,382. Beneath that lies a support trendline from December 24 lows which has not been broken since its inception. Like the DAX, the FTSE may look to consolidate above the 61.8% Fib level before another test at topside resistance. A daily close above the line would see it act as support as the week progresses. For more equity technical levels, follow @PeterHanksFX on Twitter.

Looking for a fundamental perspective on equity? Check out the Weekly Equity Fundamental Forecast.

FTSE 100 Price Chart: 4 – Hour Time Frame (June 2018 – March 2019) (Chart 4)

–Written by Peter Hanks, Junior Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

DailyFX forecasts on a variety of currencies such as the Pound or the Euro are available from the DailyFX Trading Guides page. If you're looking to improve your trading approach, check out Traits of Successful Traders. And if you're looking for an introductory primer to the Forex market, check out our New to FX Guide.

Other Weekly Technical Forecast:

Australian Forecast– AUDUSD Flirts with 200 Day Moving Average, AUDJPY Earns Strong Break

Crude Oil Forecast – Will Pres. Trump Tweet at $65?

Sterling Forecast – GBPUSD, EURGBP and GBPJPY

US Dollar Forecast – USD Searches for Direction Amidst Wedge

Gold Forecast – XAU Doji Threatens Deeper Losses

Euro Forecast – EUR/USD Attracts Bears, But Price Momentum May Reverse Higher

2019-04-14 10:00:00

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EUR/USD Attracts Bears, But Price Momentum May Reverse Higher

Posted: 13 Apr 2019 09:10 PM PDT

Euro Price Forecast Focus:

The ONE Thing: Not all is as quiet as it seems on the western front, and EUR may be the catalyst.EUR is seeing slight bullish momentum developing while retail traders on both retail and institutional desks are shorting the pair aggressively. An unwinding of the largest short EUR/USD position since 2016 could give FX traders the volatility they've been longing for, but unable to find.
A EUR bullish bias is developing against the US Dollar on a potential falling bullish wedge and the Japanese Yen per the technical indicator, Ichimoku.
If the upside drivers come together, then bears should watch out. There are shifting rate outlooks, crowded positioning, and falling bearish momentum that if unwound, could see a sharp move higher in EUR/USD for Q2.
The big story of this week was the ECB meeting, and Draghi's commentary on negative rates. If you want the overall EUR forecast, you can find it here

Technical Forecast for the Euro: EUR/USD Neutral < 1.1440, EUR/JPY Bullish

EUR/USD Sees Falling Bearish Momentum Alongside 3x MACD Divergence

Chart Source: ProRealTime charting, IG UK Price Feed. Created by Tyler Yell, CMT

A week ago, EUR bears were likely chilling their champagne bottles in anticipation of potential profits to be realized as of the close of trading this week. An ECB with a worsening economic outlook seemed to be a ripe environment for sharp losses.

On Wednesday, when the ECB met, the markets grabbed onto the message that the ECB will consider whether it needs to mitigate any of the side effects from negative rates and the long-term bank funding "solution: known as TLTRO-III, but that was not enough to bring out the bears accumulation of shorts.

Now, the EUR is moving to the highest levels since late March after forming a potential double-bottom low of $1.1184 per EUR on April 2nd (monthly opening range low).

Another pair worth trader's attention is EUR/JPY. A breakout higher in EUR/JPY could be just what the risky-asset buyers ordered for a multitude of reasons.

EUR/JPY May Push Toward Channel Resistance With This Week's Momentum

Chart Source: ProRealTime charting, IG UK Price Feed. Created by Tyler Yell, CMT

Positioning Data Shows a Crowded EUR Short Position Among Institutions

Data source: CFTC, Bloomberg

The chart above shows the largest short exposure of EUR bears from institutional leveraged traders (i.e., hedge funds) since 2016. The problem is that EUR is moving higher. In other words, if the price continues to move higher for EUR/USD, we could see an aggressive unwind similar to 2017 when EUR/USD went from $1.05 to $1.26. I don't think we'll get a perfect parallel move, but EUR bears should get optionality while it is cheap.

Looking for a fundamental perspective on the euro? Check out the Weekly EUR Fundamental Forecast.

Sentiment Shifts Gives us a Stronger EUR-Bullish Contrarian Trading Bias

Trader Sentiment is speaking, but are you listening? The large red bars you see above indicate that retail trader positioning is decisively increasing in favor of lower EUR prices.

The problem for bears is that this is a contrarian indicator, so with traders sitting further net-short than yesterday and last week, and the combination of current sentiment and recent changes what they are, we hold a stronger EURUSD-bullish contrarian trading bias than previously.

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—Written by Tyler Yell, CMT

Tyler Yell is a Chartered Market Technician. Tyler provides Technical analysis that is powered by fundamental factors on key markets as well as trading educational resources. Read more of Tyler's Technical reports via his bio page.

Communicate with Tyler and have your shout below by posting in the comments area. Feel free to include your market views as well.

Talk markets on twitter @ForexYell

Other Weekly Technical Forecast:

Australian Forecast– AUDUSD Flirts with 200 Day Moving Average, AUDJPY Earns Strong Break

Crude Oil Forecast – Will Pres. Trump Tweet at $65?

Sterling Forecast – GBPUSD, EURGBP and GBPJPY US

Dollar Forecast – USD Searches for Direction Amidst Wedge

Gold Forecast – XAU Doji Threatens Deeper Losses

2019-04-14 04:00:00

US Dollar Looks to Earnings, Economic Data to Shape Growth Bets

Posted: 13 Apr 2019 09:33 AM PDT

US DOLLAR FUNDAMENTAL FORECAST: NEUTRAL

US Dollar still mired in 2019 range, global growth bets next in focus
Q1 earnings reports, economic data deluge to inform slowdown fears
Thin pre-holiday liquidity may translate into kneejerk price volatility

Check out the latest US Dollar forecast and see what is expected to drive prices through mid-year!

Looking for a technical perspective on the US Dollar? Check out the Weekly USD Technical Forecast.

Another week of seesaw price action left the US Dollar mired within the same choppy range that has contained price action since the beginning of the year. The uptrend from early-2018 lows is nominally intact, but the currency has not made meaningful upside progress one way or another since mid-August.

Still, last week's developments offered a couple useful tidbits. First, the markets still respond to reminders about cooling global growth. The IMF's grim outlook update had a sobering effect. Second, price moves on the release of US inflation data and March FOMC minutes showed Fed policy speculation continues.

EARNINGS REPORTS, ECONOMIC DATA TO INFORM GLOBAL GROWTH BETS

Looking ahead, a focus on the macroeconomic narrative seems likely as trade war and Brexit negotiations recede to churn on in the background. A steady stream of high-profile corporate earnings reports and ample economic news will inform jittery investors eyeing a business cycle downshift.

US banks including Goldman Sachs, Citigroup and Bank of America are due to report first-quarter results. Upbeat announcements from JPMorgan and Wells Fargo buoyed market-wide risk appetite on Friday, sapping demand for haven assets and weighing on the anti-risk US unit.

This need not necessarily repeat however. The FOMC minutes painted the tone on the rate-setting committee more neutral than markets expected, boosting USD. A steady stream of Fed-speak due next week might reiterate that point, diluting scope for weakness on purely "risk-on" grounds.

The data docket is packed. Eurozone PMIs, Chinese GDP, and US industrial production are just some of the noteworthy activity indicators set to cross the wires. If the recently disappointing trend in macroeconomic news flow holds, the outcomes may weaken risk appetite on net. That bodes well for the Greenback.

LIQUIDITY TO SHRINK IN PRE-HOLIDAY TRADE

Finally, the week will be shortened by the Good Friday holiday and overall participation is likely to progressively diminish as Easter weekend draws closer in most of the world's financial centers. Thin liquidity levels may sap conviction, but they might also amplify any kneejerk volatility.

— Written by Ilya Spivak, Sr. Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivakon Twitter

US DOLLAR TRADING RESOURCES

Other Weekly Fundamental Forecast:

Australian Dollar Forecast – Australian Dollar Outlook Bearish on RBA. AUDUSD Eyes China Q1 GDP

Crude Oil Forecast – Crude Could Crumble if Growth Concerns Catch Fire Again

British Pound Forecast – GBPUSD Rate Defends Bull Trend Ahead of UK CPI Amid Brexit Extension

2019-04-13 16:00:00