DXY WEEKLY PRICE CHART

DXY Price Chart - Weekly Timeframe

Notes: We’ve been tracking this price analog in the U.S. Dollar Index since last year and heading into the Federal Reserve interest rate decision on Wednesday, the risk remains lower while below the 2017 low-week close at 91.33 (bearish invalidation). Interim support rests with the 2010 high at 88.71 backed closely by confluence support at 88.18 where the 50% retracement of the 2011 advance converges on basic slope support.

Bottom Line: The focus remains on a break of the 88.18 – 91.33 price range. A downside break would likely fuel accelerated losses towards the 2011 trendline support around ~86.75 while a topside breach would suggest that a more significant low is in place.

GBP/USD WEEKLY PRICE CHART

GBP/USD Price Chart - Weekly Timeframe

Notes: The British Pound has been trading within the confines of this ascending pitchfork formation extending off the 2016 / 2017 lows with prices turning just ahead of the upper median-line parallel early in the year. Price broke through the monthly opening-range last week and leaves the risk higher heading into the close of the month. That said, price is now approaching the median-line and a daily close above this threshold would be needed to keep the immediate advance viable.

Bottom line: The broader focus in Sterling remains weighted to the topside while above the lower median-line parallel / 2016 high-week close (Brexit) at 1.3675 (keep an eye on the RSI support trigger). A breach / close above the 2018 high-day close at 1.4134 would keep the long-bias in play targeting the 200-week moving average at ~1.4280s and the yearly high at 1.4346.

GBP/USD IG CLIENT POSITIONING

GBP/USD IG Client Sentiment

 

  • A summary of IG Client Sentiment shows traders are net-short GBPUSD- the ratio stands at -1.16 (46.3% of traders are long) – weak bullish reading
  • Long positions are 6.0% higher than yesterday and 1.5% lower from last week
  • Short positions are 4.5% higher than yesterday and 9.1% higher from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. However, retail is less net-short than yesterday but more net-short from last week and the combination of current positioning and recent changes gives us a further mixed GBPUSD trading bias from a sentiment standpoint.