GBP/USD trend uncertain after the wedge

Technical Analysis

EUR/USD remains below 1.12

“Even if Yellen might not, left to her own devices, be ready to move on rates, there is probably a growing sentiment that the time is getting closer.”

- Peterson Institute for International Economics (based on Reuters)

• Pair’s Outlook

  After a sharp drop amounted to 160 pips on Thursday, the shared currency stabilised a day later. Even though the EUR/USD pair tried to rebound toward 1.1250, it failed to sustain a recovery and closed below the round level of 1.12. Judging from technical indicators, the cross is likely to remain silent in the near term. The closest support is located at 1.1116 (weekly S1); therefore, any bearish pressure may push the Euro in the direction of this line.

• Traders’ Sentiment

  Both bullish and bearish opened positions at the SWFX market are accounting for 50% in the morning on Monday. Additionally, SWFX pending orders to buy the Euro against the US Dollar in 100-pip range from the spot are in the minority and account for just 47%.

GBP/USD trend uncertain after the wedge

“The pound has performed well so far this year, supported by evidence of continued strong cyclical momentum in the U.K. economy.”

- Bank of Tokyo-Mitsubishi (based on Bloomberg)

• Pair’s Outlook

  GBP/USD rebounded a bit after a sharp fall on Thursday. The Sterling encountered support at 1.5395, which prevented a deeper decline. Nevertheless, the Pound failed to go beyond the monthly R1 level, as it ended the trading day at 1.5431. Technical studies are giving mixed signals, indicating the pair is likely to rise in the shorter time frames; however, the daily time frame is suggesting a bearish outcome through Monday. Meanwhile, nearest resistance for the Sterling is located at a cluster of important levels around 1.5328.

• Traders’ Sentiment

  There are still more bulls than bears among the SWFX traders, namely 55% of them, whereas the number of orders to acquire the Pound remains in a minority at 44%.

Yet again USD/JPY rallies

“The BOJ shouldn’t let concern about weakening the yen further stop it from expanding policy if needed.”

- Etsuro Honda, adviser to PM Shinzo Abe (based on Bloomberg)

• Pair’s Outlook

  USD/JPY extended its gains last Friday, but added only 17 pips. Due to better than expected US GDP data release the Greenback breached the weekly R1 level. However, the pair did not surge too high, settling not far from the R1 resistance at 119.57. Moreover, taking into account the technical indicators, which are mostly pointing north-ish, the US Dollar is likely to maintain its bullish momentum through Monday. Closest resistance is still the weekly R1, but this time at 120.06, as the pair opened this week at 119.70.

• Traders’ Sentiment

  Percentage of longs decreased over the weekend, as bulls lost two percentage points and now account for 56% of all positions. At the same time, the number of buy orders edged up back to 61%.

XAU/USD gains value for fourth consecutive day

“The prospects of better growth and stronger income should boost gold-buying in China.”

- Phillip Futures (based on CNBC)

• Pair’s Outlook

  It seems that a major round level of 1,200 succeeded in providing Gold with considerable bullish momentum. The precious metal surged above 1,210 back on Friday of the last week and continued to increase further in the morning on Monday. At the moment of writing the metal is trading just above 1,220 level, which is strengthened by 20-day SMA and weekly R1 from above. Therefore, bullish development will soon meet a significant resistance area. Moreover, daily technical indicators still prefer a strong bearish case for Gold in the short term.

• Traders’ Sentiment

  Sentiment toward the precious metal is remaining strongly optimistic among SWFX traders, while a total share of bullish positions accounts for 68% in the early morning on Monday of a new working week.