GBP/USD aiming for the Jan low

Technical Analysis

EUR/USD opens doors towards monthly S1

“The dollar is vulnerable to U.S. economic data surprises, and soft prints are likely to keep it on the back foot.”

- Credit Agricole SA (based on Bloomberg)

• Pair’s Outlook

  EUR/USD decided to go further and trade upwards during yesterday's trading session. The pair has finally overcome a difficult resistance at 1.0942 (monthly S2) and neared the round level of 1.10. However, it is likely that bulls will soon be stopped and the Euro may resume falling, as soon as EUR/USD touches the 1.1070 mark. This area is strengthened not only by monthly S1 and weekly R1, but also by a medium-term downward trend line of December-March bearish move.

• Traders’ Sentiment

  Bullish opened positions at the SWFX market are accounting for 42% this morning, down two percentage points from Wednesday. During last four days, longs have accumulated a total loss of 6%.

GBP/USD aiming for the Jan low

“The pair may remain trapped in a 1.4800-1.5000 range ahead of external cues and with UK February retail sales numbers due later today. We continue to expect a top-heavy tone in the interim, especially amid back ground election concerns.”

- OCBC Bank (based on FX Street)

• Pair’s Outlook

  On Wednesday, the British Pound advanced, but not as far as expected. The pair tested the January low; however, it lacked strength to reach resistance at 1.4918 and stopped at 1.4881. The current context of the market suggests a further rally of the Pound, despite the bearish technical indicators. The fundamental factors are presently in play, and they are likely to aid the British currency in getting back up to the January low.

• Traders’ Sentiment

  The gap between the long and short positions widened, as 46% of traders now have a positive outlook towards the Sterling. The number of buy orders also declined, from 49% to 40%.

USD/JPY edging closer to 119.00

“USD/JPY has broken an uptrend support line which has been in place since January and it just seems the pressure could mount in the near term.”

- IG Securities (based on WBP Online)

• Pair’s Outlook
  

  Even though USD/JPY fell, the decline was not significant, and the pair’s attempts to reach the support cluster at 119.00 turned out unsuccessful. However, the US Dollar still dropped 26 pips and settled at 119.47. The technical studies retain their mixed signals, although the Greenback will probably weaken after the Unemployment Claims data release later today (unless the figures decrease). As a result, the 119.00 floor might be breached, although the Dollar is likely to close around this level.

• Traders’ Sentiment

  Bullish market sentiment strengthened, as 65% (previously 63%) of traders are now long the Buck. The share of purchase orders grew as well, from 62% to 69%.

XAU/USD extends gains above 1,200

“There is some resistance at the $1,200 mark. If we see more weakness in the U.S. dollar and some more weak data, gold could rally more.”

- a precious metals trader in Hong Kong (based on CNBC)

• Pair’s Outlook
  

  For the first time since March 4, XAU/USD cross returned above the major 1,200 level as a result of seven straight daily increases. The bullion crossed two important resistance lines, at 1,195 (Jan-Mar down-trend) and 1,198 (weekly R1). From the point of view of technical analysis' tools, Gold is currently in a good position to extend its bullish tendency up to the 1,220 area where it is going to meet the next cluster of supply levels. However, daily technical indicators became more pessimistic and are now giving signals to sell the precious metal.

• Traders’ Sentiment

  Sentiment towards the precious metal is optimistic among SWFX traders as the total share of bullish positions (64%, -3% since Wednesday) has a strong advantage over the bearish ones at the moment.