FXCM/DailyFX Signals and Strategies

US Dollar at Critical Point versus Euro, Kiwi. Big FX Moves Ahead

Today's Thursday, which means David Rodriguez's weekly update for the Speculative Sentiment Index (SSI) was just posted on DailyFX.com

Highlights:

1. Retail forex traders have never been more long the US Dollar versus major counterparts
2. A break in key price levels alongside sentiment extremes points to big FX moves
3. Our focus remains on Dollar versus European pairs and the New Zealand Dollar

Weekly Summary of Forex Trader Sentiment and Changes in Positioning

http://media.dailyfx.com/illustratio...Picture_12.png

FX trading crowds have never been more long the US Dollar versus the Euro or New Zealand Dollar.

Trade Implications – EURUSD: The fact that crowds continue selling into Euro strength suggests the EURUSD may continue higher. Yet the chart below will show that traders are often their most short at the top; how do we trade?

http://media.dailyfx.com/illustratio...Picture_14.png

Two of our SSI-based trading strategies (Breakout2 and Momentum2) are currently giving signals to buy EUR/USD. Both signals are can be automated on your FXCM account via the Mirror Trader platform.

Scalping the EUR/USD: Breakout or Fakeout?

Does an RBNZ Hike Ensure a NZD/USD 0.8500 Breakout?



Talking points in this video:

1. The market is fully pricing in expectations of a 25 bp rate hike from the RBNZ to 2.75%
2. While the rate move is important, the trend is likely to be decided by forecasts for future hikes
3. NZD/USD is wedged into a breakout pattern between 0.8500 and 0.8400 awaiting a spark
4. The Breakout2 strategy on Mirror Trader can be used to signal or confirm trade setups

Just an update on yesterday's post: Breakout2 went long NZD/USD at 0.84864

http://i.imgur.com/ZXVlYMO.png

US Dollar at Big Turning Point versus Euro

It's Thursday which means the weekly update of the Speculative Sentiment Index (SSI) was posted today on DailyFX.com



Retail forex traders remain extremely long the US Dollar across the board warning of potentially big moves ahead.



If EUR/USD closes above 1.3970, that could sound the all clear in favor of further rallies.



Indeed, going against the crowd remains attractive as long as the single currency remains above key support at 1.3830.

Every Monday, quantitative strategist David Rodriguez shares his trading strategy bias for the week on DailyFX.com

Below are the DailyFX+ trading strategies he believes will work best for individual currency pairs based on current market conditions.

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All of the SSI-based strategies above can be automated on your FXCM account via the Mirror Trader platform.

All Eyes on Fed as US Dollar Near Major Support versus Japanese Yen

USD Sets Key Low on Upbeat FOMC; Key Levels to Watch

Gold Prices Likely Set Significant Peak

Retail traders have bought aggressively into recent Gold price declines versus the US Dollar. Notice how in the image below the Speculative Sentiment Index (SSI) flipped from being negative (brown bars mean traders are net short) to being positive (green bars mean traders are net long).

https://media.dailyfx.com/illustrati...Picture_18.png

This important shift in sentiment suggests that the XAU/USD exchange rate likely set an important peak. The majority of traders had turned short Gold as it crossed above the $1275 level, so that could possibly act as a price target to the downside now.

An update on my post last week regarding Gold, the DailyFX team just tweeted the following:

$XAUUSD falls to a new monthly low at 1310.21 and may next find support by the 200-day moving average at 1298.58.

To follow all their latest trading ideas, you can follow the DailyFX team on Twitter.

Is this Australian Dollar Rally the Real Deal? Probably Not

The Australian Dollar trades at critical trendline and moving average resistance versus the US Dollar, but key correlations suggest it will run out of steam.

https://media.dailyfx.com/illustrati..._Picture_8.png

View the following forex correlations to the S&P 500, S&P Volatility Index (VIX), Crude Oil Futures prices, US Treasury Yields, and Spot Gold prices.

https://media.dailyfx.com/illustrati..._Picture_5.png

For a guide on reading the above chart, visit DailyFX.com

GBP/USD Setup Targets Key Support - Scalp Bias Constructive Above 1.6469

Kiwi Flies Higher

A major reversal higher in the New Zealand Dollar has been met with aggressive selling by the crowd. Notice how the brown negative SSI bars below have recently lengthened confirming that retail traders have increased their short positions.

https://media.dailyfx.com/illustrati...Picture_15.png

Our contrarian view of crowd sentiment favors further highs. The sharp build in crowd selling leaves our focus to the topside, and a break of the April peak at 0.8675 seems likely.

NZD/USD looks to be ending March on a high note. The rate tagged the 2013 high this week and is pressing against the line that extends off of the 1996 and 2007 highs.

NZD/USD Weekly Chart

https://media.dailyfx.com/illustrati..._Picture_4.png

That line crosses through the 2008, 2011, and 2014 highs as well. In 2011 (record free float high), the rate surged through the line in late July before topping on August 1st.

Does something similar happen here? The channel that defines the advance from the 2011 low is just above the record high in April.

Dollar Steady but Outlook Bullish



Talking Points:
• The dollar - like most currencies - is struggling for drive with risk trends meandering and NFP ahead
• Scenarios for sentiment trends and yield forecasts, however, largely support the greenback
• The missing component for a dollar rally is a rebound in market-wide activity and conviction

AUD/USD Setup Pending Weekly Range Break

Daily Chart
https://media.dailyfx.com/illustrati...DUSD_DAILY.png

 

1. Near-term bias shifts lower with break below 9208/18
2. Subsequent support objectives 9140/47, 9080 & 9046
3. Breach above 9338 targets resistance at 9394 & 9522

Gold Prices See no Relief in Sight as Further Lows likely

Retail traders turned net-long Gold as it turned down from $1390 and have only increased their buying as the price has declined. Our Speculative Sentiment Index (SSI) shows that long interest (indicated by the green bars in the chart below) is now at its highest since December.

https://media.dailyfx.com/illustrati...Picture_16.png

Since SSI is a contrarian indicator, the fact that the majority of retail traders are long Gold suggests that prices could drop further.

Below is a tweet shared this morning by the DailyFX Research team:

$AUDUSD falls to a daily low at 0.9254 and may next find support by the 8/12/13 high at 0.9221

https://pbs.twimg.com/media/BkoIjDuCAAASv_m.png:large

And is that an inverse head and shoulders pattern I see?

For all their latest trade ideas, you can follow the DailyFX Research team on Twitter.

Possible trend shift in GBP/JPY – going short

The Momentum2 strategy is based on our proprietary Speculative Sentiment Index (SSI) a contrarian indicator that looks at the ratio of long to short positions in a currency pair among retail traders.

Instead of simply looking at whether SSI is net short or net long for a given pair, it looks for relative changes in net positioning.

http://i.imgur.com/NdHrnlV.png

Past performance is not necessarily indicative of future results.

The strategy is currently giving a signal to short GBP/JPY because SSI has hit its most extreme positive level for the past 145 trading hours at -1.263, which suggests that the pair could be trending downwards.

Momentum2 and other DailyFX PLUS Trading Signals can be automated on your FXCM account via the Mirror Trading platform. You can use your Trading Station login and password to access Mirror Trader.

Chinese GDP has potential to spark risk



FXCM now offers trading in the offshore Chinese Yuan (USD/CNH)