GBP/USD plunges beneath monthly pivot point

Technical Analysis

EUR/USD approaches monthly PP

“No one wants to push euro/dollar higher before the ECB meeting. It’s likely the ECB will have some unconventional easing measures in the next three months.”

- Westpac (based on Bloomberg)

• Pair’s Outlook
  

  For now this week is bullish for EUR/USD, as it is about to post a third day of gains. Still, there are significant obstacles lying overhead and posing significant risks to the currency recovery, such as the monthly pivot point at 1.3815. If this hurdle is overcome, the currency pair will be expected to target the rising trend-line at 1.3948/25, where it will also encounter the monthly R1 level.

• Traders’ Sentiment

  The traders’ sentiment towards EUR/USD stays bearish, being that 63% of all open positions are short, just as yesterday; though the 10-day average is 65%. In the meantime, there was an increase in the sell orders placed 100 pips from the spot—their percentage grew from 51% to 56%.

GBP/USD plunges beneath monthly pivot point

“At current levels of $1.66, sterling/dollar is priced for the BoE tightening well before the Fed.”

- UBS (based on Reuters)

• Pair’s Outlook

  At first it looked as if the Sterling is going to continue the advancement seen last week. However, despite the bullish technical signals on the weekly and monthly time-frames, the price declined, being unable to withstand the selling that was triggered after a test of the upward-sloping resistance line. The Pound is likely to remain under pressure until it reaches the support at 1.6590, which is created by the weekly PP and 55-day SMA.

• Traders’ Sentiment

  The share of the SWFX market participants believing the British Pound is going to lose value against the U.S. Dollar increased, namely from 63% to 66%. At the same time the number of sell orders fell, from 61% to 57%.

USD/JPY probes resistance at 104

“The combination of rising global equity markets with rising U.S. Treasury yields is a catalyst for USD/JPY to move higher.”

- Societe Generale (based on CNBC)

• Pair’s Outlook

  The U.S. Dollar disregards the daily and weekly technical indicators and strengthens relative to the Japanese Yen. As the supply at 103.34 is now out of the way, USD/JPY is facing the resistance at 104.00/103.79, which should prove to be a tough level to breach, as it is mainly created by the 2013 highs. In case it fails to turn the pair around, this year’s highs at 105.43 is to become the next target.

• Traders’ Sentiment

  According to the view of the market, USD/JPY seems to be crossing a dense supply area. This is evidenced by a precipitous decline in the long positions (from 75% down to 62%) and a substantial increase in the sell orders (from 49% up to 67%) compared to the readings recorded 24 hours ago.

USD/CHF slides towards monthly PP

“The focus is on U.S. data.”

- TD Securities (based on Reuters)

• Pair’s Outlook

  After hitting the ceiling at 0.89 USD/CHF stays in a down-trend. However, there is a chance that the dip will not extend beyond the support at 0.8813/03. There the monthly PP, weekly S1 and 20-day SMA will attempt to increase demand for the U.S. Dollar and thus stop its further depreciation. Though it must be noted that most of the technical studies are bearish, suggesting that the monthly S1 at 0.8728 may eventually come into play.

• Traders’ Sentiment

  SWFX market participants are using this opportunity to purchase the greenback at the lower prices, believing that USD/CHF will soon start moving north. Accordingly, the bullish towards the pair sentiment is strengthening, it went from 71% to 73%.