Amana FS Daily Market Reports
Late yesterday, bullish traders took out the critical January high, but it is first in the last few hours that price is trying to leave behind the important January high of 153.70. What makes the 153.70 level interesting is that the next major high and potential target of bullish traders is now the June 23 high of 160.16. That is a level that is 576 pips higher than the current price.
Volatility will probably remain high as it has been over the last few months, and the price could experience sharp drops, but as long as the price trades above the trend-defining low of January 11 at 150.13, then it would be fair to anticipate the price to edge higher.
Client sentiment is also suggesting higher prices. Our latest estimate shows that about 75 percent of retail traders are short GBPJPY, and given the contrarian nature of client sentiment, this suggests a higher GBPJPY in the weeks ahead.
GBPUSD is now firmly trading above 1.3837 after yesterday’s failed attempt to take out this level. The next psychological resistance level and potential target of traders is the 1.39 level, followed by March 2016 low of 1.40.
I suspect the short-term trend will remain bullish as long as the price trades above the January 15 low of 1.3722, and that pullbacks towards this level will be met by new buyers. However, if the price slips below the January 15 low of 1.3722, then the trend might turn bullish, and traders might target the January 3 high of 1.3616.
The average retail trader remains bullish on the U.S. Dollar, but their position has moderated slightly over the last few days as traders are probably cutting losses following the declines in the Dollar. The most extreme positioning is in the NZDUSD, AUDUSD, and USDCAD. While, positioning in the EURUSD and GBPUSD has moderated slightly, with 68% and 70% of traders being long the USD respectively.
Given the contrarian nature of retail client positioning, our sentiment indicator, suggests that the Dollar can continue to decline in the weeks ahead.
Watch our morning update for out latest technical outlook on EUR/USD, Bitcoin, Crude oil, DAX 30, and gold prices.
In today’s update:
- The EURUSD remains bullish, but the price is also slightly overbought causing traders to reduce their long positions.
- The price of bitcoin has started to stabilize as bargain hunters support price.
- Crude oil is trading sideways below its yearly high of $64.89.
- Gold prices have corrected 50% of their latest rally.
- The DAX 30 is bullish above the January low of 12732, but traders appear to be waiting for a better risk-reward ratio before adding to their long
Watch the video for the details.
Today, crude oil prices are slightly lower as it appears that traders are booking profits following the 16.17% price rise since December 6.
Looking beyond today’s decline, the trend is bullish above the January 5 low of 61 USD per barrel, and I suspect traders might use a pullback to add to their bullish exposure. The price might rise to the yearly high of $64.89, followed by the May 2010 low of $67.13, if the price indeed carves out a low between 61 and 62.45 dollars per barrel as I anticipate. However, on a failure of the 61 level to hold as support, the trend might turn bearish, and the decline might accelerate.
Bitcoin (BTC/USD) remains in a downtrend, and the price is now nearing the November 30 low of $8961. A breach to this level may trigger traders to target the November 21 low $7766, followed by the November 12 low of $5630.
Near-term resistance is the December 30 low of $12010, followed by the trend defining high of 14626 formed on January 13. For now, the price needs to breach the January 13 high for the trend to turn bullish.
BTC/USD Log Chart