GBP/USD dives beneath 1.57

Technical Analysis

EUR/USD unable to cross monthly PP

“The possibility of a renewed downturn [in Germany] at the start of next year is clearly becoming more and more likely, especially if the survey data continue to disappoint.”

- Markit (based on Bloomberg)

• Pair’s Outlook
  

  EUR/USD cross was pretty much unchanged during the first day of the new week, even though it managed to rise above the significant resistance line, represented by the monthly pivot point at 1.2468. Eventually, the pair returned back to trade below this level. We assume this resistance to be rather strong for EUR/USD's bulls to cross it; therefore, we expect a gradual decline of the pair in the foreseeable future.

• Traders’ Sentiment

  Market sentiment on EUR/USD pair deteriorated even more, as right now 42% of all opened positions stay long on the Euro. Bullish pending orders in 100-pip range, however, registered almost no changes, as they remained on the negative territory with 49%.

GBP/USD dives beneath 1.57

“There is little evidence here that weaker global growth or a stronger dollar has hurt U.S. manufacturing.”

- RDQ Economics (based on Reuters)

• Pair’s Outlook

  The GBP/USD cross has failed to surpass the monthly PP at 1.5755 repeatedly and that has dragged the pair below the weekly PP that is located at 1.5672. Moreover, the majority of the daily and weekly technicals are pointing to the downside; therefore, with this additional pressure the pair is likely to return to trade in the boundaries of the longer-term downtrend.

• Traders’ Sentiment

  The sentiment of the SWFX traders' has changed from slightly bullish to completely neutral, as a identical number of traders have opened long and short positions. Also, the share of buy commands has narrowed, and the amount of buy orders dropped from 71% to 50%.

USD/JPY correction can extend to 116.75

“Unfortunately, we fear that reform progress will remain glacial in coming years.”

- Capital Economics (based on CNBC)

• Pair’s Outlook

  USD/JPY has extended its correction to 117 level and shortly the pair will face the weekly S1 and monthly PP at 116.91/75 that could halt the decline. Although, its not set in stone that the pair will not fall further, if these support levels fail to do their job. The technical indicators are neutral in all time frames and that could suggest that correction is coming to an end and consolidation could follow.

• Traders’ Sentiment

  The sentiment of the SWFX market participants remains neutral with respect to USD/JPY, as of today 52% of the market participants are long. Regarding the orders placed 100 pips from the spot, the concentration of buy orders remain in strong majority, namely 73%.

Gold's decline stopped by weekly S1

“This week sees the last FOMC meeting of the year and ahead of this, I suspect the markets will trend sideways to slightly lower as we await any mutterings of rate rises.”

- Marex Spectron (based on MarketWatch)

• Pair’s Outlook

  On Monday, Gold declined significantly and even breached the important support at $1,205. However, it seems the bearish momentum was spent completely when crossing this level, as XAU/USD was easily stopped by the next demand level at $1,193, represented by the weekly S1. As a result, we are expecting Gold to recover slightly on Tuesday, as this idea is also assumed by daily technical indicators.

• Traders’ Sentiment

  During last 24 hours, the overall market sentiment on Gold jumped noticeably to reach its highest level in many weeks, as now long opened positions on the SWFX market account for 75% of all.