Jump to content

Euro Forecast: EUR/USD, EUR/JPY, EUR/GBP Short Bets Rise. Will Gains Follow?


Recommended Posts

EURO, EUR/USD, EUR/JPY, EUR/GBP, TECHNICAL ANALYSIS, RETAIL TRADER POSITIONING - TALKING POINTS

  • Retail traders are increasingly betting that the Euro may weaken ahead
  • Is this a sign that EUR/USD, EUR/JPY & EUR/GBP may climb instead?
  • What are key technical levels to watch for should net-short bets increase?
EUR/USD Price Forecast - Euro Breaks Down through 50 Day EMA

Glancing at IG Client Sentiment (IGCS), retail investors are increasingly betting that the Euro may weaken against the US Dollar, Japanese Yen and British Pound. As a result, net-long exposure in EUR/USD, EUR/JPY and EUR/GBP are on the decline. IGCS can often function as a contrarian indicator. If this trend in positioning continues, the Euro could advance in the coming days.

EUR/USD SENTIMENT OUTLOOK - BULLISH

The IGCS gauge shows that about 52% of retail traders are net-long EUR/USD. Since the majority of investors are net-long, this suggests prices may continue falling. However, downside exposure has increased by 19.71% and 40.87% compared to yesterday and last week respectively. The combination of overall and recent changes in positioning hint that prices may reverse higher.

Euro Forecast: EUR/USD, EUR/JPY, EUR/GBP Short Bets Rise. Will Gains Follow?

TECHNICAL ANALYSIS

EUR/USD continues to consolidate within the boundaries of an Ascending Triangle chart formation. The direction of the breakout could hint at the coming trend. For now, a falling trendline from June is nearing. The latter could reinstate the dominant downtrend since last year. Otherwise, taking out the trendline exposes the 1.1525 inflection point. Closing under triangle support exposes the 1.1169 – 1.1195 range.

 

EUR/USD DAILY CHART

Euro Forecast: EUR/USD, EUR/JPY, EUR/GBP Short Bets Rise. Will Gains Follow?

Chart Created in Trading View

EUR/JPY SENTIMENT OUTLOOK - BULLISH

The IGCS gauge shows that roughly 30% of retail traders are net-long EUR/JPY. Since the majority of investors are net-short, this suggests prices may continue rising. This is as downside exposure increased by 23.28% and 22.22% compared to yesterday and last week respectively. With that in mind, the combination of overall and recent changes in positioning offers a bullish-contrarian trading bias.

Euro Forecast: EUR/USD, EUR/JPY, EUR/GBP Short Bets Rise. Will Gains Follow?

TECHNICAL ANALYSIS

Despite recent consolidation, EUR/JPY remains in a near-term uptrend since December. Zooming further out, the pair has been ranging since May 2021. Clearing immediate resistance, which appears to be the 61.8% Fibonacci retracement at 131.471, exposes the 78.6% level at 132.638. Turning lower places the focus on the 20-day Simple Moving Average, which may reinstate the uptrend.

 

EUR/JPY DAILY CHART

Euro Forecast: EUR/USD, EUR/JPY, EUR/GBP Short Bets Rise. Will Gains Follow?

Chart Created in Trading View

EUR/GBP SENTIMENT OUTLOOK - BULLISH

The IGCS gauge shows that about 76% of retail traders are net-long EUR/GBP. Since the majority of investors are still biased to the upside, this could hint at further losses. However, downside exposure has increased by 20.27% and 40.53% compared to yesterday and last week respectively. With that in mind, the combination of overall and recent changes in positioning hint EUR/GBP may climb from here.

Euro Forecast: EUR/USD, EUR/JPY, EUR/GBP Short Bets Rise. Will Gains Follow?

TECHNICAL ANALYSIS

Following persistent losses since September 2020, EUR/GBP has now finally declined to the upper boundary of the 0.8282 – 0.8339 support zone. This range is made up of lows achieved in 2020. As such, the pair may bounce off this zone, placing the focus on the 38.2% Fibonacci extension at 0.8430. On the other hand, clearing the support zone exposes the 61.8% extension at 0.8251.

EUR/GBP DAILY CHART

Euro Forecast: EUR/USD, EUR/JPY, EUR/GBP Short Bets Rise. Will Gains Follow?

Chart Created in Trading View

*IG Client Sentiment Charts and Positioning Data Used from January 11th Report

Written by Daniel Dubrovsky, Strategist for DailyFX.com. 12th Jan 2022.

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • The risk rebound continues in a quiet week, though tech stocks are still edging down after their strong gains in the first weeks of June. Asian stocks made headway overnight, led by the ASX 200 and the Nikkei 225, though mainland Chinese stocks suffered losses. Today sees the release of Canadian CPI data, but the main focus remains the US PCE data on Friday. Signs of weakening of price growth in these figures would give new life to the hope of rate cuts in the US this year. European markets recovered yesterday, though first round French elections on Sunday loom large and futures have turned lower ahead of the open. Yesterday's big name faller was Nvidia, which shed 7% and dragged other tech stocks lower, though the the broader US stock market appears able to shrug these losses off for now.
    • ASX: AMCOR PLC – AMC Elliott Elliott Wave Technical Analysis TradingLounge (1D Chart)   Greetings, Our Elliott Wave analysis today updates the Australian Stock Exchange (ASX) with AMCOR PLC – AMC. We see that AMC is about to continue pushing higher with the 3-grey wave of (3)-orange.   ASX: AMCOR PLC – AMC Elliott Wave Technical Analysis   ASX: AMCOR PLC – AMC 1D Chart (Semilog Scale) Analysis Function: Major trend (Intermediate degree, orange) Mode: Motive   Structure: Impulse Position: Wave ((iii))-navy of Wave 3-grey of Wave (3)-orange Details: The short-term outlook shows that wave ((ii))-navy looks like it has just ended and wave ((iii))-navy is opening to push higher. Invalidation point: 14.79   ASX: AMCOR PLC – AMC Elliott Wave Technical Analysis TradingLounge (4- Hour Chart) ASX: AMCOR PLC – AMC Elliott Wave Technical Analysis ASX: AMCOR PLC – AMC 4-Hour Chart Analysis Function: Major trend (Minuette degree, orange) Mode: Motive Structure: Impulse Position: Wave (i)-orange of Wave ((iii))-navy of Wave 3-grey Details: The shorter-term outlook shows that wave (i)-orange is unfolding and will soon complete, followed by wave (ii)-orange opening to push slightly lower, and then wave (iii) -orange back to push higher, aiming for a target at around 16.13. Invalidation point: 14.79   Conclusion:   Our analysis, forecast of contextual trends, and short-term outlook for ASX: AMCOR PLC – AMC aim to provide readers with insights into the current market trends and how to capitalize on them effectively. We offer specific price points that act as validation or invalidation signals for our wave count, enhancing the confidence in our perspective. By combining these factors, we strive to offer readers the most objective and professional perspective on market trends.   Technical Analyst: Hua (Shane) Cuong, CEWA-M (Master’s Designation). Source : Tradinglounge.com get trial here!  
    • Elliott Wave Analysis TradingLounge Daily Chart, Ripple/ U.S. dollar(XRPUSD) XRPUSD Elliott Wave Technical Analysis  Function: Counter Trend Mode: Corrective Structure: Triangle Position: Wave E Direction Next higher Degrees: wave 4 of Impulse Wave Cancel invalid level: 0.486 Details: Movement within the triangle pattern before the price Declines again in Wave 5. Ripple/ U.S. dollar(XRPUSD)Trading Strategy: Decreasing wave ((E)), which is the last wave in the Triangle pattern before prices re-enter the uptrend. So wait for the correction to complete to join the trend again. Ripple/ U.S. dollar(XRPUSD)Technical Indicators: The price is below the MA200 indicating a downtrend, The Wave Oscillator is a Bearish Momentum.   Elliott Wave Analysis TradingLounge H4 Chart, Ripple/ U.S. dollar(XRPUSD) XRPUSD Elliott Wave Technical Analysis  Function: Counter Trend Mode: Corrective Structure: Triangle Position: Wave E Direction Next higher Degrees: wave 4 of Impulse Wave Cancel invalid level: 0.486 Details: Movement within the triangle pattern before the price Declines again in Wave 5. Ripple/ U.S. dollar(XRPUSD)Trading Strategy: Decreasing wave ((E)), which is the last wave in the Triangle pattern before prices re-enter the uptrend. So wait for the correction to complete to join the trend again. Ripple/ U.S. dollar(XRPUSD)Technical Indicators: The price is below the MA200 indicating a downtrend, The Wave Oscillator is a Bearish Momentum.   Technical Analyst : Kittiampon Somboonsod Source : Tradinglounge.com get trial here!  
×
×
  • Create New...
us