Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD touched 7-month low at 1.0565
“We expect the ECB will cut the deposit rate by more than the market expects next week. This should keep the euro a sell on rallies into the meeting and allow the euro to test $1.05 if the ECB meets our expectations.”
- Royal Bank of Scotland (based on Bloomberg)
Pair’s Outlook
A first bunch of strong US data boosted the Dollar on Wednesday, thus sending EUR/USD down to a 7-month low of 1.0565. However, later the pair rebounded to close the session somewhat above 1.0620. However, the bias is negative and we foresee additional losses for the Euro in the foreseeable future. Yesterday's development confirms ability of EUR/USD to slide as low as April low at 1.0519. This is the closest major support for the pair, which should be able to cap a sell-off for some period of time.
Traders’ Sentiment
SWFX open positions are swinging between gains and losses as the share of bulls rose from 49% to 51% in the past 24 hours. 48% of pending orders are set to buy the Euro in both 50 and 100-pip ranges, up from only 36% and 39% on Wednesday, respectively.
GBP/USD trades flat, attempts to prolong the rally
“We see very little to upset or upend the December rate hike, cumulatively, we think there's no reason for the Fed not to act.”
- U.S. Bank Wealth Management (based on Reuters)
Pair’s Outlook
The Sterling outperformed the US Dollar yesterday, amid the budget announcement in the Autumn Forecast Statement. However, despite this correction, the Cable is still expected to touch the Nov low of 1.5026, before making its way higher to retest the down-trend. The weekly S1 is an obstacle today, providing immediate support and holding the losses for now. Technical studies in the daily timeframe shifted from bearish to mixed, suggesting there is a possibility for the GBP/USD to extend the rally, also taking advantage of the US bank holiday today.
Traders’ Sentiment
Today 53% of traders are holding long positions (previously 52%), whereas the number of sell orders added 1% point, climbing to 58%.
USD/JPY struggles at preserving the up-trend
“A December rate increase has been factored in. The focus is on when would be the next and how fast they were going to raise rates subsequently, and they wouldn’t be in a hurry.”
- Sumitomo Mitsui Trust Bank (based on Market Watch)
Pair’s Outlook
The Greenback managed to rebound from the up-trend on Wednesday and even tested the immediate resistance in face of the weekly PP. Even though the support remains relatively strong, risks of it getting breached persist, as the trading range between the up-trend and the weekly PP is narrowing. The USD/JPY was unable to pierce the given pivot point through most of the week and is likely to struggle at doing so today as well. However, there is still room for a 20-pip surge and technical indicators are bolstering this outcome.
Traders’ Sentiment
Bears keep gaining numbers, with nearly three quarters (74%) of all open positions being short. Meanwhile, the portion of orders to acquire the US currency remains unchanged at 56%.
Gold is stuck between July low and weekly PP
“The dollar index is within reach of the multi-year high of 100.39. A break of this level would put downside pressure on gold with a break of $1,066 yielding initial $1,045, which is the 2010 low.”
- ScotiaMocatta (based on CNBC)
Pair’s Outlook
More or less optimistic US statistics used to have a "reminder" effect for investors who switched back to Fed policy expectations. However, Wednesday's move downwards was again limited by July low at 1,070. The bullion is has been pressured by this important support for the second consecutive week. It makes us assume that the bears need more pronounced impetus to send the price towards fresh lows below 1,064 (Nov 18 low). Thursday and Friday are US data-free days, meaning volatility is highly likely to remain restrained.
Traders’ Sentiment
Market sentiment with respect to gold remains strongly positive for the moment, being that more than 72% of SWFX traders are holding long positions. However, risks are skewed to the downside as gold seems to be overbought.
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 clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Geopolitics once again take centre stage, as UK Retail Sales wither
Nearly a week to the day when Iran sent drones and missiles into Israel, Israel has retaliated and sent a missile into Iran. The initial reports caused a large uptick in the oil price.