GBP/USD remains stuck around 1.56

Technical Analysis

EUR/USD still below 1.10

“Despite the heightened sensitivity to data, it is worth noting that the Fed’s bar to rate hikes remains relatively low, suggesting that market overreaction to each data point is likely excessive.”

- TD Securities (based on WBP Online)

• Pair’s Outlook

  EUR/USD traded in a soft downtrend on Monday, while overall this currency pair remained hovering below the 1.10 mark. The short-term outlook will be somewhat bearish, as long as the long-term downtrend/recent high around 1.11 stay intact. Additional pressure on bulls should be created by the monthly/weekly PP at 1.10. Bears are going to aim at the Jul 30 low near 1.0893, which is followed by the May/Jul low at 1.0818/08. On the other hand, daily and weekly technicals are neutral at the moment.

• Traders’ Sentiment

  The share of bullish open positions in 100-pip range advanced from 53% to 55%. Long pending orders, however, dropped significantly from 53% to 36% during the past 24 hours.

GBP/USD remains stuck around 1.56

“Whilst previous dissenting votes have not been a good indicator of a change in policy, and there have been plenty of false starts to the rate hiking cycle in the UK; this time it is a little different, with wage growth climbing for the first time and the unemployment rate down at 5.6%.”

- UOB Group (based on FXStreet)

• Pair’s Outlook

  The Sterling failed to remain flat against the US currency, as it tested the strong support around 1.5570. Nevertheless, the trend-line pushed the Cable back up to 1.5589, where it stabilised. Consequently, the British Pound is expected to regain the bullish momentum today and pierce the immediate resistance in face of the weekly PP. Technical studies, on the other hand, retain their mixed signals, creating a possibility of a slump, especially if the UK fundamentals disappoint today.

• Traders’ Sentiment

  Traders, on the other hand, have a positive outlook towards the Pound today, as 68% of all positions are long (previously 50%). The number of buy commands returned to its Friday’s level of 54%.

USD/JPY gravitates towards 124.00

“The labor market data on Friday is the big event. The Fed is ready to lift off; if we get a strong reading on jobs, over 200,000, the lift-off is on track.”

- BBH (based on CNBC)

• Pair’s Outlook

  The USD/JPY remained relatively unchanged on Monday, as the pair only suffered a nine-pip loss. The weekly PP along with the 20-day SMA prevented the Greenback from edging lower and are expected to do so again today. As a result, we US Dollar is likely to rebound and climb above the 124.00 major level once again. However, for the past several days the pair was glued to the psychological 124.00 area; therefore, the rally is unlikely to exceed 25 pips. Meanwhile, technical studies’ signals shifted from mixed to bullish ones, bolstering the possibility of the positive outcome.

• Traders’ Sentiment

  Exactly three quarters of all positions are now long (previously 70%), whereas the share of purchase orders dropped from 71 to 70%.

XAU/USD closes at lowest level since 2010

“A delay in the Fed's rate hike expectations would be interpreted as bullion friendly.”

- HSBC (based on CNBC)

• Pair’s Outlook

  Even though gold still seems to be locked in the vicinity of 1,100 by showing no abrupt movements, yesterday it succeeded in pushing the daily candle to a new five-year low closing price of 1,084. Nonetheless, the most important target is placed at 1,071, where the Jul 20 low remains untouched. Bearish risks increase, as daily technical indicators are now giving signals to sell gold. Therefore, the mid-term outlook is pessimistic, as long as the yellow metal is trading at any levels below the long-term downtrend around 1,105.

• Traders’ Sentiment

  As a post factum reaction to negative market movements, the positive sentiment with respect to the precious metal retreated considerably yesterday. The portion of long open positions dived from 72% to 59%, the lowest level in two months.