GBP/USD risks falling under 1.53

Technical Analysis

EUR/USD slid down to 100-day SMA

“The euro is weighed down by the ECB, with current unstable financial markets keeping the course of policy uncertain.”

- Bank of Tokay-Mitsubishi UFJ (based on Bloomberg)

• Pair’s Outlook
  

  EUR/USD was sold-off on Thursday, while posting negative reaction to the ECB's dovish comments. At the same time, a decline was not strong enough to push the Euro below the 100-day SMA at 1.1122. This level also guards next moving averages on 200 and 55-day time frames at 1.1093/75. Therefore, we do not see an immediate failure here. On the contrary, the pair confirmed the Aug 28 low, meaning that any recovery is quite unlikely to extend noticeably higher. Meanwhile, Friday's development is hugely dependent on US payrolls data later today.

• Traders’ Sentiment

  Market sentiment picked up from 50% to 51% today, while the portion of buy orders in 100-pip range increased by seven percentage points to reach 43%.

GBP/USD attempts to break its two-week bearish trend

“Any boost for the dollar from a solid jobs report could be limited as the recent financial market turmoil has strengthened expectations that the Fed will delay hiking rates.”

- Monex (based on CNBC)

• Pair’s Outlook
  

  The British Pound declined against the US Dollar on Thursday, breaching the major level of 1.53. Although the immediate support cluster was reached, the pair managed to stabilise slightly higher at 1.5257. The 55-day SMA recently pierced the 100-day one to the downside, giving a signal to sell the Sterling, but the weekly S1 at 1.5227 might still provide sufficient support in order to turn the Cable around. If the US fundamental fail to disappoint, the GBP/USD is likely to decline to 1.52 level, also bolstered by the monthly S1 and the lower Bollinger band.

• Traders’ Sentiment

  Bulls are in the majority once more, taking up 59% of the market. The share of buy orders also increased, from 32 to 58%.

USD/JPY remains under the risk of reaching 2015 low

“The stakes are unusually high for this employment report [non-farm employment change], as it will be the last major piece of labor market data before the Fed meets later this month.”

- TD Securities (based on WBP Online)

• Pair’s Outlook
  

  On Thursday, the Greenback sustained minor losses against the Japanese Yen, as anticipated. The weekly PP was tested, but trade still closed slightly above the 120.00 major level; however, the given PP risks being pierced today, despite having kept the USD/JPY from declining through the week. Poor labour figures are likely to push the US Dollar deeper down all the way to 118.00, as that would delay the interest rate hike. Conversely, strong data could boost the Buck above 121.50, reaching the highest point in the last two weeks.

• Traders’ Sentiment

  Bullish SWFX traders’ sentiment improved today, as 60% of all positions are long (previously 56%). Meanwhile, the number of purchase orders slightly diminished, taking up 48% of the market.

XAU/USD intended to drop below 1,124

“Gold is already pricing in diminished odds of a September rate hike.”

- Phillip Futures (based on CNBC)

• Pair’s Outlook
  

  The precious metal was trading downwards for a second consecutive day on Thursday as it plummeted below the majority of crucial supports in the 1,131-24 area. Among them 2014 low, 20-day SMA and monthly pivot point have already been breached. At the moment bears are focusing on 55-day SMA, the last support in the observed demand zone. Friday's performance will mainly depend on US labour market fundamentals as positive numbers may push gold down to recent lows at 1,117, which are followed by the weekly S1 at 1,110. Despite that, bulls are still hoping to reverse the negative trend and come back above 1,131.

• Traders’ Sentiment

  SWFX sentiment with respect to gold recovered from the lowest level in 15 weeks, as bulls and bears are now holding 53% and 47% of all open positions, respectively.