GBP/USD exceeds expectations

Technical Analysis

EUR/USD fails to return back above 1.0760

“The sharp decline in oil prices since the middle of last year has probably been the biggest single factor that has helped an improvement in economic conditions, not only in Europe…”

- CMC Markets (based on WBP Online)

• Pair’s Outlook
  

  On Wednesday, EUR/USD has mostly repeated the scenario of Tuesday's development. The Euro attempted to jump above 2003 low/20-day SMA, but failed eventually and returned back towards weekly PP at 1.0724. For now the pair is trading just below this mark, and in case it falls beyond 1.07, then the probability of even stronger slump will increase significantly. The medium-term target is still located at 1.06, while technicals are pointing downwards.

• Traders’ Sentiment

  The total number of bullish opened positions at the SWFX market remained unchanged during past 24 hours at 49%. Pending orders to buy the Euro against the US Dollar in 100-pip range from the spot decreased to 37% from yesterday, down five percentage points.

GBP/USD exceeds expectations

“The BOE's April meeting minutes detailed, policymakers remain cautiously optimistic about the state of the economy, leaving the door open for potential action later this year if the country can sort out its electoral woes.”

- DailyFX (based on CNBC)

• Pair’s Outlook
  

  The Sterling over-performed on Wednesday, as it pierced through the initial resistance. Moreover, the next one, namely the 55-day SMA, was also breached, as the GBP/USD added 106 pips, despite the strong figures from the United States. Today the technical indicators are pointing north, suggesting the bullish momentum is to persist. Immediate resistance rests at 1.5090, represented by the Bollinger band and the 100-day SMA. Meanwhile, the 55-day SMA should prevent any downside volatility during the trading hours.

• Traders’ Sentiment

  Market sentiment remains unchanged, with 41% of traders being long the Pound. The number of buy commands, on the other hand, dropped from 51 to 42%.

USD/JPY attempts to reach 120

“USD price action suggests market participants may be rebuilding USD long positions cautiously, in anticipation of a potentially more hawkish message from the Fed or more dovish message from the BoJ at next week’s policy meetings.”

- BNP Paribas (based on WBP Online)

• Pair’s Outlook
  

  On Wednesday, US Dollar appreciated against Yen amid substantial improvements in US fundamentals. However, USD/JPY failed to reach the initial resistance at 120.11. Today the Greenback is likely to edge down, unless the US data surprises again to the upside. The 20-day SMA lacks strength to stop a decline, thus a fall towards the weekly PP is the most probable outcome. Nevertheless, we should not rule out the possibility of a surge towards 120.26. The technical studies retain mixed signals, unable to bolster either scenario.

• Traders’ Sentiment

  Traders’ outlook towards the Buck remains positive, as the share of bulls returned to its Tuesday’s level of 72%. The gap between buy and sell orders narrowed to 52% vs 48%.

XAU/USD confirms bearish intentions

“There are still too many countervailing forces in play and gold is stuck as a result.”

- Linn Group (based on Wall Street Journal)

• Pair’s Outlook
  

  The bullion has finally decided to show some decisive move on Wednesday. Influenced by general bearish trend since April 6, Gold plummeted sharply yesterday and fell as low as weekly S1 at 1,188. Consolidation below this important support should affirm the medium-term negative outlook, and the metal should set a new target level below 2013 low at 1,180. This idea is shared both by weekly and monthly indicators. However, upside risks remain in place, especially in case Gold rebounds back above 1,190.

• Traders’ Sentiment

  Bulls have a substantial advantage over bears at the SWFX market, as they are holding 73% of all opened trades in the morning on Thursday, up one percentage point during past 24 hours.