USD/JPY consolidates around 118

Technical Analysis

EUR/USD breaches weekly PP

“This report will go some way in providing further confirmation about the sustainability of the current economic recovery.”

- TD Securities (based on Reuters

• Pair’s Outlook

  The EUR/USD’s short-term upward trend, which started two days ago, continued on Tuesday, as the shared currency gained more value and crossed the weekly pivot point at 1.2444. Moreover, the pair decided to go even further to the north and closed at 1.2480 at the end of the day. Despite that, daily and weekly technical indicators continue pointing downwards, meaning that we can observe a consolidation in the nearest future.

• Traders’ Sentiment

  Distribution between bullish and bearish positions returned back to the levels seen five days ago. At the moment 51% and 49% of traders are holding long and short positions, respectively, while pending orders are still slightly bearish in both ranges.

GBP/USD jumps above 1.57

“We probably have more momentum heading into the final quarter of the year. We’re probably on pace for another 3 percent to 3.5 percent growth in the final three months.”

- Societe Generale (based on Bloomberg)

• Pair’s Outlook

  It seems that for the time being a resistance at 1.5724, represented by the weekly R1 is too strong for GBP/USD’s bulls to cross it. Yesterday, the pair managed to climb above the major level at 1.57, but was stopped by the resistance 20 pips above. If the Cable eventually crosses this level, we can see it rising up to 1.58. Otherwise, a decline back to monthly S2 is very likely, as suggested both by daily and weekly technical studies.

• Traders’ Sentiment

  The gap between long and short positions continued to widen on Tuesday. Right now 61% of them are taken by bulls and 39% by bears. Pending orders, however, changed insignificantly, as 56% of them are now set to sell the Pound in 100-pip range from the spot.

USD/JPY consolidates around 118

“By not acting, the BOJ might risk its credibility. Such a circumstance would not only render my outlook unfeasible but would also undermine the feasibility of the 2 percent target.”

- Sayuri Shirai, BoJ board member (based on Reuters)

• Pair’s Outlook

  For the fifth consecutive day the USD/JPY cross has been hovering around 118, which is holding the pair from going in any direction. From the south it is well-supported by monthly R2 and weekly pivot point around 117.30. Therefore, a further upside movement is more likely in the foreseeable future. This scenario is also suggested by technical indicators in short and medium-term ranges. The next resistance is located at 118.97 (2014 high).

• Traders’ Sentiment

  Market sentiment on the USD/JPY pair is still undecided, as bulls’ advantage over the bears remains at 4%. Distribution of pending orders, in turn, is more pronounced in favour of bulls, as 62% of them are positive on the Buck in 100-pip range from current price.

Supply at pushed USD/CHF below weekly PP

“With gas prices falling back, it gives consumers a little more purchasing power which seems to be setting up for a pretty solid Christmas season. I would look for something like 2.5 percent (consumer spending) for the quarter.”

- Amherst Pierpont Securities (based on CNBC)

• Pair’s Outlook

  The 2014 high at 0.9714 has eventually made the USD/CHF currency pair to lose value. Yesterday, the pair dropped below the weekly pivot point and closed at 0.9634. In case the pair fails to regain bullish momentum and return back above the mentioned support, it will come under the risk to went down to 0.9589, where the weekly S1 has its location. Technical studies, however, are neutral in the short-term and expect a rise of the Buck on a weekly time-frame.

• Traders’ Sentiment

  The advantage of bulls over bears remains very strong. At the moment 63% of all opened positions are long and 37% stay short on the US dollar. Pending orders tend to support the market sentiment and are set to acquire the Greenback in the majority of all cases.