GBP/USD pierced through 1.66

Technical Analysis

EUR/USD backed by 100-day SMA

“The ECB gave a case for not easing in March, and the data haven’t really deteriorated sharply from there. The inflation number will be the big test of that statement.”

- RBS (based on MarketWatch)

• Pair’s Outlook

  Although the support at 1.3733/1.3680 is not letting the sell-off to carry on, EUR/USD at the same time is failing to gain a bullish momentum in order to leave this area. Still, as suggested by the weekly and monthly technical indicators, eventually the price is going to advance north. Then it will initially encounter the weekly PP at 1.3777 and the weekly R1 at 1.3850 afterwards.

• Traders’ Sentiment

  The bearish with respect to the Euro sentiment has somewhat weakened, but the short positions remain in a distinct majority over the long ones, as they take up as much as 64% of the market. In the meantime, the share of sell orders declined from 60% down to 55% 100 pips from the spot price.

GBP/USD pierced through 1.66

“The data shows consumers on the high street are feeling more confident about the UK's recovery, and it is data like this that will fuel expectations for a rate hike from the Bank of England come early 2015.”

- UKForex (based on Reuters)

• Pair’s Outlook

  Following a rebound from the 100-day SMA and 2011 highs at 1.65 GBP/USD has breached a number of tough resistances, including the 55-day SMA and monthly pivot point. Accordingly, a chance of further appreciation of the Sterling increased, also considering the technical signals on the weekly and monthly time-frames. However, there is strong resistance at 1.6722/12 represented by the weekly R1 and, more importantly, by the recently broken up-trend.

• Traders’ Sentiment

  Continuous outperformance of the Pound relative to the greenback lately convinced many of the SWFX market participants that the former currency is overvalued and they short-sold it, bringing the percentage of bears from 57% up to 62% over the weekend.

USD/JPY tests 100-day SMA

“The structural change in Japan’s current account is the main driver of our weaker yen call.”

- Commonwealth Bank of Australia (based on Bloomberg)

• Pair’s Outlook

  Despite the resilience the 55-day SMA has recently demonstrated, in the end USD/JPY has managed to spike through the line and reach 103.03/102.76, which consists of the monthly R1 and 100-day SMA. Should the bulls continue pushing the price higher, the U.S. Dollar will soon encounter the supply area at 103.44/34—the last resistance that stands guard over the 2013 highs at 104.

• Traders’ Sentiment

  Apparently, the traders did not exploit the latest surge in USD/JPY in order to close their positions. Instead, they were encouraged by these development and enhanced their long exposure. Now the bulls constitute 75% of the SWFX market, while last Friday their portion amounted to 71%.

USD/CHF wavers in face of 0.89

“There has been a risk-on move in the currency market.”

- UBS (based on CNBC)

• Pair’s Outlook

  USD/CHF has already closed the downside gap but remains hesitant to extend the gains due to a seemingly impenetrable supply zone. Apart from the 2012 lows and the falling resistance line, the area is also reinforced by the 55 and 100-day SMAs and the monthly pivot point. Moreover, most of the weekly and monthly technical studies imply a bearish outlook on the pair.

• Traders’ Sentiment

  The gap between the long and short positions has somewhat narrowed since the previous report, but the sentiment is nonetheless strongly bullish, being that 73% of open positions are long. As for the orders, 50 pips from the spot the share of buy ones plummeted from 69% to 29%.