Technical Analysis
EUR/USD depreciates further
“Greece is heading into the endgame, and a default remains a real possibility. If the euro falls, that should spill over to dollar buying.”
- Mizuho Securities Co. (based on Bloomberg)
Pair’s Outlook
Yesterday, EUR/USD managed to consolidate below the monthly PP (1.1003) and is moving further downwards on Tuesday. This event negated the potential upside pressure and market is now likely to focus on the bearish development. Initial demand is currently offered by 55-day SMA, which is placed at 1.0924. The next support is, in turn, located around 1.0850 (weekly S1; Bollinger band), which also guards the long-term target at 1.0740 (monthly S1).
Traders’ Sentiment
The gap between long and short positions narrowed since , as bulls are currently keeping 48% of all opened positions. Meanwhile, the commands to buy the Euro against the US Dollar in 100-pip range from the spot dropped by 11% over the past 24 hours to 40%.
GBP/USD stuck in tight range between 1.54 and 1.55
“That [Fed’s September rate hike] leaves the USD bulls marginally with the upper hand; we say marginally because markets are already largely expecting the same and you need something additional to trigger fresh momentum.”
- ANZ (based on Reuters)
Pair’s Outlook
The Sterling remained flat against the US Dollar through Monday, despite significant upside volatility. As the pair edged up during the first half of the day, the 20-day SMA, along with the 1.55 psychological area, pushed the Cable back to its opening level. Nevertheless, the British currency is likely to suffer some losses today, with the closest support still being the 200-day SMA around 1.5405. Meanwhile, technical indicators keep showing mixed signs, unable to confirm the outcome.
Traders’ Sentiment
Bulls and bears are edging closer to equilibrium, as 48% of traders now hold long positions (previously 46%). There are now more buy commands, as their portion shifted from 49 to 57% of the market.
USD/JPY takes another crack at Dec 2014 high
“It's a dollar-driven market right now, rather than a yen-focused one. Yellen made it clear that the Fed will hike rates and under such conditions the question for participants is what currency to sell.”
- State Street (based on CNBC)
Pair’s Outlook
Although the USD/JPY did rise on Monday, gains were not as high as anticipated. The pair remained volatile for some time, but the Bollinger band at 121.77 still prevented it from surging too far. Ultimately, the US Dollar stabilised at 121.65, with expectations of another rally today. Even though technical studies retain mixed signals, the Greenback is likely to appreciate against the Yen and cross the Dec 2014 high, as the Bollinger band shifted above 122 psychological level. Nonetheless, the resistance area remains strong and might push the Buck back eventually.
Traders’ Sentiment
The share of bulls dropped from 58 to 57%, whereas the number of buy orders now accounts for 71% of the market (previously 77%).
XAU/USD is unchanged since last Wednesday
“We maintain the view that the third quarter is likely to be the weakest quarter for gold, given that we expect the Fed to start increasing rates in September, but the potential downside is likely to be limited.”
- Barclays (based on CNBC)
Pair’s Outlook
For the fifth consecutive day the yellow metal has been remaining broadly unchanged just above the 1,205 mark, even though it has made several attempts to exit from the vicinity of 1,203-1,212 range. The closest supports and resistances are keeping the bullion range bound. XAU/USD needs to consolidate either above 1,213 or below 1,203 to confirm its bullish or bearish intentions, respectively. Meanwhile, daily technical indicators are now sending strongly positive signals to buy gold, but medium and long-term ones are still staying pessimistic on the cross.
Traders’ Sentiment
Advantage of bulls over bears at the SWFX market is remaining insignificant, even though the gap between them widened even more during the past 24 hours. The total share of bulls currently stays at 56% versus 44% for bears.
This overview can be used only for informational purposes. Dukascopy SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.
Recommended Content
Editors’ Picks
USD/JPY flat-lines below 151.50 after soft Japanese CPI data
USD/JPY stays defensive below 151.50 after the release of a soft Japan's CPI report and mixed Industrial Production and Retail Sales data on Friday. Japanese verbal intervention also weighs on the pair amid the holiday-thinned conditions on Good Friday. US PCE inflation awaited.
AUD/USD buyers lack vigor above 0.6500 amid Good Friday trading lull
AUD/USD is trading listlessly above 0.6500 in the Asian session amid light trading on Good Friday. The Aussie pair shrugs off encouraging comments from China's FX regulator, as price action remains subdued ahead of the US PCE inflation data.
Gold flirts with record highs above $2,230, all eyes on US PCE data
Gold price flirts with record highs around $2,230 during the Asian session on Friday. The uptick of yellow metal is bolstered by the safe-haven flows amidst growing economic concerns and the prospect of interest rate cuts from the US Federal Reserve.
Optimism price could fall as nearly $90 million worth of OP tokens is due flood markets
Optimism volatility has shrunk in the ours leading to the network’s cliff unlock. It joins the likes of dYdX and Sui, which have similar events on their calendars. As token unlocks are often considered bearish catalysts, investors should brace for a reaction after the event.
Will they won’t they cut rates is the question of Q2?
There has been some significant push back from Fed and Bank of England members around the timing of rate cuts, and the Bank of Japan still haven’t physically intervened in the FX market to stem yen weakness although they are threatening to do so.