GBP/USD erodes demand at 1.48

Technical Analysis

Weekly PP pushed EUR/USD below 1.08

“Markets are becoming more sensitive to the Greek issue. In addition, the European Central Bank’s quantitative easing is keeping downward pressure on the euro. Fundamentals point to euro selling.

- Bank of America Merrill Lynch (based on Bloomberg)

• Pair’s Outlook

  A strong resistance area, created by weekly PP and monthly S2, managed to send the Euro down on Monday. The pair fell closer to the next support represented by the 2003 low/weekly S1 around 1.0760, also by crossing round level of 1.08. However, EUR/USD is not expected to breach this demand with ease, as the second obstacle is located just 40 pips below 2003 low at 1.0709. Therefore, pair is forecasted to stay above 1.0750 in course of Tuesday.

• Traders’ Sentiment

  Bullish opened positions at the SWFX market are accounting for 46% this morning, up three percentage points since Monday. Pending orders to buy the Euro against the US Dollar in 100-pip range from the spot are accounting for 33% in the morning today.

GBP/USD erodes demand at 1.48

“Sterling is going to weaken in the next month because of election risk. Our forecast for cable (dollar/sterling) is $1.42 and for euro/sterling to trade higher in the short term. It will recover after the election.”

- BNP Paribas (based on Reuters)

• Pair’s Outlook

  The Cable failed at 1.49 and tumbled to a lower edge of its trading range. At the moment the currency pair is underpinned by the weekly S1 and monthly S2 at 1.4782/60. However, because of waning topicality of this support area (monthly pivots will be recalculated tomorrow), the bears have a solid chance of pushing the price lower, down to 1.47, which has already proven to be a tough level to breach.

• Traders’ Sentiment

  The long/short ratio remains unchanged. Right now 46% of open positions are long and 54% are short. At the same time, the percentage of orders to purchase the Sterling surged from 40 up to 61%.

USD/JPY: strong rebound from 119.00

“The euro is being driven lower against the dollar on Greek problems, and that in turn is firming the dollar against the yen.”

- SMBC Friend Securities Co. (based on Bloomberg)

• Pair’s Outlook

  As expected, a dense demand zone around 119.00 prevented extension of the losses and turned the recent downward trend around. As a result, USD/JPY is now attacking the weekly R1, and the upward momentum should continue to evolve. The main challenge for the bulls is anticipated at 122.00, which has already stopped advancement of the pair on two occasions: in December and in the first half of March.

• Traders’ Sentiment

  The latest rally of USD/JPY seems to have encouraged more bulls to enter the market. Now they constitute 73% of all traders. However, there might be a lack of demand going forward, being that only 52% of pending orders set nearby are buy ones (64% yesterday).

XAU/USD's drop stopped by 2013 low

“Gold's inability to hold over the psychological $1,200 level, which it recently cleared, suggests that bullion may be susceptible to a further consolidation of gains.”

- HSBC (based on CNBC)

• Pair’s Outlook

  In line with expectations, XAU/USD failed to limit its downward correction within any range above the long-term downtrend line. Gold lost around $15 per ounce on Monday and fell back below the major support line at 1,192. At the same time, the bullion received some bullish impetus from 2013 low and weekly S1 at 1,180 which capped the yellow metal from losing even more value. Despite bullish daily technical indicators, a short-term rebound seems unlikely, while a slump below 1,173 (monthly S1) might clear the way towards weekly S2 at 1,158.

• Traders’ Sentiment

  Sentiment towards the precious metal is optimistic among SWFX traders as the total share of bullish positions (62%, -2% since yesterday) has a strong advantage over the bearish ones at the moment.