GBP/USD closes in on 1.50

Technical Analysis

EUR/USD stays steady around 1.16

“New factors supporting growth, lower oil prices, but also depreciation of euro and yen, are more than offset by persistent negative forces, including the lingering legacies of the crisis and lower potential growth in many countries.”

- International Monetary Fund (based on Reuters)

• Pair’s Outlook

  EUR/USD has finally added some value after major losses that took place during several consecutive days in a row. The single currency advanced around 50 pips to hit the 1.16 level at the end of trading. Despite that, from above a significant resistance area has been created both by the weekly PP and 2005 low, which are unlikely to let bulls succeed. Therefore, we expect the euro to step back and deteriorate towards monthly S3 at 1.1466 in the foreseeable future.

• Traders’ Sentiment

  For the first time in 22 working days, sentiment on the EUR/USD currency pair turned to be bearish, as the share of short positions is now enjoying a majority at 52%. Meanwhile, pending orders stay completely unchanged, as longs are still having only 38% of them.

GBP/USD closes in on 1.50

“Carney made it very clear there’s no more QE on the cards whilst Draghi makes it very clear QE is indeed on the cards.”

- Mizuho Bank Ltd. (based on Bloomberg)

• Pair’s Outlook

  Having breached the monthly S3, the Cable keeps slowly grinding lower, and it may soon reach 1.50. The last time the pair approached this level, GBP/USD surged more than 200 pips in the next four days. Nevertheless, as long as the major down-trend (currently at 1.5450) stays intact, the bearish outlook will remain valid. We expect the Sterling to slide down to the 2013 low at 1.48 in the next few weeks.

• Traders’ Sentiment

  The distribution between the bulls and bears remains relatively stable—59% of open positions are long and 41% are short. The percentage of commands to sell the Pound in the radius of 100 pips from the spot price declined from 63 to 58%.

USD/JPY attacks resistance at 118

“Markets took Chinese data to be slightly stronger than expected. That’s underpinning dollar-yen which is seen to have a firm correlation with risk sentiment.”

- Bank of America Merrill Lynch (based on Bloomberg)

• Pair’s Outlook

  Although the resistance at 118 was seen as capable of preventing a rally, USD/JPY is currently eroding the resistance created by the 55-day SMA, 23.6% Fibo and weekly PP. Should this supply area be violated, the monthly pivot point at 119 will be come the next target, followed by the late December highs at 121. Conversely, if the bears withstand the buying pressure, the US Dollar is to return to 116, namely in the vicinity of the monthly S1 and 38.2% Fibo.

• Traders’ Sentiment

  The bulls continue to increase their share. At the moment they take up 62% of the market (61% yesterday and 57% five days ago). The share of buy orders went up as well, but from 59 to 63% within the last 24 hours.

XAU/USD supported by down-trend

“The expectation is gold will move higher towards $1,300, however we are likely to see a profit taking driven pull back with support for such a move lower sitting around $1,250.”

- MKS Group (based on CNBC)

• Pair’s Outlook

  On Monday, gold continued to be rather well supported by the long-term downtrend line which takes its beginning point in July 2014. As a result, XAU/USD cross has put itself in the narrow range between the mentioned support and monthly R2 at $1,283. Judging from technical indicators on both daily and weekly charts, the bullion should gain enough bullish momentum from the $1,275 level to continue gaining value. On the other hand, the nearest supply area is reinforced by the 61.8% Fibo and Bollinger band around $1,295.

• Traders’ Sentiment

  Distribution between opened positions for buying and selling Gold is still remaining rather positive and in favor of former, but bulls' majority over bears plunged even more to reach 58% this morning, compared to 64% around 24 hours ago. As a result, share of bulls plummeted to the lowest level in five weeks.