Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD on track to erode weekly losses
“The [German] producer-price index data has encouraged a lower euro.”
- Canadian Imperial Bank of Commerce (based on Bloomberg)
Pair’s Outlook
Yesterday the EUR/USD cross strengthened the most since Nov 12, by piercing through the 1.07 mark and consolidating somewhat below 1.0750 by the end of trading. Both weekly pivot point and monthly S1 at 1.0758/68 are unlikely to be crossed on Friday, unless any shock for the Dollar appears unexpectedly. However, it will be enough for the pair to eliminate losses of Monday-Tuesday. In the meantime, Mario Draghi's speech later in day may renew a sell-off today. Our expectations therefore remain fairly bearish.
Traders’ Sentiment
Bullish share of open positions contracted from 54% to 52% in the SWFX market by Friday morning. Meanwhile, pending orders to buy the Euro in 100-pip range from the spot returned to minority of 41% (52% yesterday).
GBP/USD in limbo before UK Public Sector Net Borrowing
“In terms of the trajectory of fed funds, we continue to see two more rate hikes in the first half of 2016. We then expect the Fed to remain on hold in the second half of 2016 to ascertain the effects of the cumulative 75 basis-point tightening on the economy and the financial markets.”
- Deutsche Bank (based on WBP Online)
Pair’s Outlook
The GBP/USD reached as high as the 200-day SMA on Thursday, but lost some of the gains and closed under 1.53. Today the Cable is stuck in tight range between the 20 and 55-day SMAs and might maintain trade within this area today due to lack of market movers. A correction is still the most probable outcome, with a possibility of the immediate support failing to hold the losses. Technical studies are supporting this scenario, but one fundamental event could provide the Sterling with sufficient strength to pierce the nearest resistance levels and even retest the 200-day SMA at 1.5340.
Traders’ Sentiment
Bearish traders’ sentiment returned to its Wednesday’s level of 61%, whereas no changes in the buy and the sell order ratio occurred.
USD/JPY trades flat, edges closer to the up-trend
“Foreign players appeared to have cleared out positions before the long Japanese weekend, pushing the dollar lower. Japanese investors, on the other hand, are buying on price dips and preventing a further decline.”
- Global-info Co (based on Reuters)
Pair’s Outlook
The US currency lost over 75 pips against the Yen yesterday, caused by the FOMC meeting minutes results, in spite of the December hike possibility remaining in play. The second support barely managed to hold the losses and is now providing resistance, leaving the USD/JPY under the risk of falling again today. The closest support is now represented by the up-trend, along with the weekly S1, monthly R1 and 20-day SMA. The Greenback is unlikely to recover from such a slump today due to lack of market movers, whereas technical indicators suggest the pair might trade flat over the day.
Traders’ Sentiment
Almost three quarters (74%) of all positions are now short (previously 70%), while the share of buy orders slid from 51 to 46%.
Gold wants to retake 1,084
“We're still negative and target $985 in the short run.”
- UBS Wealth Management (based on CNBC)
Pair’s Outlook
Gold surged the most since Oct 14 on Thursday, by jumping from July low at 1,070 towards the weekly pivot point at 1,084. Today we may observe a consolidation above the latter mark. Closure above 1,090 will mean that the bullion managed to fully erase this week's losses. Short term rally is possible as traders see the Fed's December rate hike looming, but the pace of tightening will be slow. Gains should be contained by the 1,100 mark, where the monthly S1 is placed at the moment. However, next week's development may provide gold with another downward momentum.
Traders’ Sentiment
Market sentiment with respect to gold remains strongly positive for the moment, being that 72% of SWFX traders are holding long positions, up from 71% yesterday.
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
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.