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AUD/USD, NZD/USD, EUR/USD Retail Positioning Analysis Around Election

AUD/USD, NZD/USD, EUR/USD, US Election, Trader Positioning – Talking Points

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In this week’s webinar on IG Client Sentiment (IGCS), I discussed the outlook for AUD/USD, NZD/USD and EUR/USD around the early stages of results for the US presidential election. IGCS is a contrarian indicator. For a deeper dive into what this means and for fundamental analysis, check out the recording of the session above where I also outlined the road ahead for the Dow Jones, crude oil and gold prices.

Australian Dollar Sentiment Outlook – Bullish

The IGCS gauge implies that about 39% of retail traders are net long AUD/USD. Exposure to the downside has decreased by 28.42% and 22.05% over a daily and weekly basis respectively. The combination of current sentiment and recent changes offers a stronger bullish contrarian trading bias.

AUD/USD, NZD/USD, EUR/USD Retail Positioning Analysis Around Election

Australian Dollar Technical Analysis

AUD/USD is pressuring the ceiling of a Descending Triangle chart pattern in the aftermath of a bearish ‘Death Cross’. The latter formed after the 50-day Simple Moving Average (SMA) crossed under the 20-day one. Early signs of positive RSI divergence is showing that downside momentum is fading. Key support sits below as the 0.7006 – 0.7043 zone. A climb above 0.7244 exposes the August high.

AUD/USD – Daily Chart

AUD/USD, NZD/USD, EUR/USD Retail Positioning Analysis Around Election

Australian Dollar Chart Created in Trading View

New Zealand Dollar Sentiment Outlook – Neutral

The IGCS gauge implies that about 34% of retail traders are net long NZD/USD. Upside bets have decreased by 30.62% over a weekly basis while downside exposure declined 41.17% over the same period. The combination of current sentiment and recent changes offers a mixed trading bias.

AUD/USD, NZD/USD, EUR/USD Retail Positioning Analysis Around Election

New Zealand Dollar Technical Analysis

NZD/USD appears to be trading within an Ascending Channel since the middle of September. Moreover, the pair is in a consolidative state, trading between support (0.6503 – 0.6537) and resistance (0.6756 – 0.6798). If the channel holds, we may see a slow and steady ascent towards resistance for a shot at uptrend resumption.

NZD/USD – Daily Chart

AUD/USD, NZD/USD, EUR/USD Retail Positioning Analysis Around Election

New Zealand Dollar Chart Created in Trading View

Euro Sentiment Outlook – Neutral

The IGCS gauge implies that about 45% of retail traders are net long EUR/USD. Upside exposure has decreased by 22.56% over a daily basis while rising 21.93% over a 5-day period. The combination of current sentiment and recent changes givesa further mixed trading bias.

AUD/USD, NZD/USD, EUR/USD Retail Positioning Analysis Around Election

Euro Technical Analysis

EUR/USD is once again pressuring the 1.1612 – 1.1696 key support zone. Positive RSI divergence does how that downside momentum is fading. That can at times precede a turn higher. Moreover, the pair has been consolidating since late July with key resistance sitting at 1.1932 – 1.2011. Still, a drop through support exposes the 1.1446 – 1.1496 inflection zone.

EUR/USD – Daily Chart

AUD/USD, NZD/USD, EUR/USD Retail Positioning Analysis Around Election

Euro Chart Created in Trading View

*IG Client Sentiment Charts and Positioning Data Used from November 4th Report

— Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter