GBP/USD climbs up for another day

Technical Analysis

EUR/USD erases 55-day SMA

“They are looking to see the extent of the bounce back in activity. It leaves them in waiting mode.”

- Deutsche Asset & Wealth Management (based on Reuters)

• Pair’s Outlook

  Yesterday, the EUR/USD currency pair has eventually penetrated one of the most important short-term resistances, represented by 55-day SMA at 1.0926. The pair has therefore hit its highest level since April 6. Despite that, the Euro closed the trading day at 1.0962 and the next supply remains untouched at the moment. Still, EUR/USD is estimated by be capped by January low at 1.1027. However, in order to refocus attention to bears, the pair should return back at least below the monthly PP at 1.0811.

• Traders’ Sentiment

  Distribution between long and short positions at the SWFX market remains biased in favour of the latter, as bulls are currently in the minority with only 42% of all opened positions.

GBP/USD climbs up for another day

“A powerful expectation for stronger [US economic] growth remains very much intact, and this is why neither the policy bias at the Fed nor the level of yields has changed since the last FOMC meeting on March 18.”

- TD Securities (based on WBP Online)

• Pair’s Outlook

  On Tuesday, Cable managed to over-perform. GBP/USD breached strong resistance cluster around 1.53 and kept rising up to 1.5328. This is the third week of pure gains for the Sterling, with exception of last Monday, when the Pound suffered a small setback. Technical indicators are showing bullish signs, suggesting further rally. The Bollinger band is also backed by 1.54 psychological level and weekly R2, which together should stop the surge. However, a jump towards the 200-day SMA at 1.5493 should not be dropped off the map.

• Traders’ Sentiment

  Less SWFX traders have a positive outlook towards the Sterling, as 43% of all positions are long. The portion of purchase orders is now in the majority; they take up 51% of the market.

USD/JPY marches to 118

“The acknowledgement of the weak data might be at the margin, dollar negative. But the bar for hawkish surprises is now much lower than it was two or three weeks ago.”

- Standard Chartered (based on CNBC)

• Pair’s Outlook

  US Dollar dropped down versus Japanese Yen on Tuesday. The resistance cluster at 119.20 proved to be resilient enough to prevent USD/JPY from advancing. As a result, the Greenback bounced back and lost 30 pips. On Wednesday, we expect the Buck to extend its decline, while technical studies are giving mixed signs. Immediate support is located around 118.30, represented by the Bollinger band and the weekly and monthly S1s. This cluster should prevent the pair from falling too deep or reaching the 118 level today.

• Traders’ Sentiment

  Market sentiment slightly worsened, as the share of bulls lost one percentage point. Now 71% of traders are long the Buck. The number of buy orders also decreased, from 58 to 56%.

XAU/USD grows strongly for second day

“On balance, we’d expect that gold and the precious metals should receive some lift this week based on…more dovish expectations.”

- TD Securities (based on Wall Street Journal)

• Pair’s Outlook

  Following a considerable gain on Monday, the yellow metal continued jumping significantly during the second trading session of this week as well. The bullion surged more than $10 per ounce and settled above the 100-day SMA at 1,211. This mark is also a location of the Bollinger band at the moment. However, for the near-term outlook to become completely bullish, XAU/USD has to advance above the next resistance zone at 1,221 (monthly R1; 200-day SMA). Otherwise, there is a risk that this supply will eventually push the bullion back to trade downwards.

• Traders’ Sentiment
  
  Advantage of bulls over bears at the SWFX market is considerable at the moment, as the former are dominating by keeping 71% of all opened positions, down two percentage points from yesterday.