AUD/USD, EUR/USD, GBP/USD, Trader Positioning – Talking Points
- Will AUD/USD extend losses, inspiring upside exposure in retail investors?
- EUR/USD could fall as net-long bets accumulate after bearish technical cues
- GBP/USD also at risk to a turn lower after rejecting key resistance recently
In this week’s webinar on IG Client Sentiment (IGCS), I discussed the outlook for AUD/USD, EUR/USD and GBP/USD. 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 NZD/USD and gold prices starting around the 31-minute mark.
Australian Dollar Sentiment Outlook – Mixed
The IGCS gauge implies that about 41% of retail investors are net long AUD/USD. Upside exposure has decreased by 7.01% over a weekly basis while downside bets have fallen by 5.48% over the same period. The combination of current sentiment and recent changes offers a further mixed trading bias.
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Australian Dollar Technical Analysis
AUD/USD could fall ahead after prices failed to hold a push above the medium-term 50-day Simple Moving Average (SMA). As such, the bearish ‘Death Cross’ formation held as prices also turned lower in the falling trend line from late August. Resuming August’s top entails taking out the 0.7015 – 0.7064 inflection zone.
AUD/USD – Daily Chart
Australian Dollar Chart Created in Trading View
Euro Sentiment Outlook – Bearish
The IGCS gauge implies that about 43% of retail investors are net long EUR/USD. Upside exposure has increased by 14.19% and 13.40% over a daily and weekly basis respectively. Recent changes in sentiment warn that the current price trend may soon reverse lower despite the fact traders remain netshort.
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Euro Technical Analysis
EUR/USD also recently failed to hold a push above the 50-day SMA. This has kept the bearish ‘Death Cross’ in play after the short-term 20-day SMA crossed under the former. This has left prices testing the 1.1696 – 1.1736 inflection zone after taking out the rising trend line from late September. A close under the former exposes key support at 1.1612.
EUR/USD – Daily Chart
Euro Chart Created in Trading View
British Pound Sentiment Outlook – Bearish
The IGCS gauge implies that about 46% of retail traders are net long GBP/USD. Downside exposure has decreased by 12.25% and 0.90% over a daily and weekly basis respectively. Recent changes in sentiment warn that the current price trend may soon reverse lower despite the fact traders remain netshort.
Follow me on Twitter @ddubrovskyFX for updates on price trends and retail positioning!
British Pound Technical Analysis
GBP/USD has also failed to hold a push above the 50-day SMA, keeping the bearish ‘Death Cross’ in play. Prices are testing near-term rising support from late September after key resistance was established between 1.3007 and 1.3083. Resuming August’s top entails a drop through the 1.2676 – 1.2763 support zone.
GBP/USD – Daily Chart
British Pound Chart Created in Trading View
*IG Client Sentiment Charts and Positioning Data Used from October 13th Report
— Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com
To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter