Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD is still capped by 1.1538
“We’ve come down a long way with virtually any tightening in 2016 priced out, but we’re at a point when there’s almost too much bad news in the dollar.”
- National Australia Bank (based on Bloomberg)
- Pair’s Outlook
Yesterday's trading conditions were light, even despite broad presence of important US statistics including the first insight into labour market's performance in April. The Dollar-bullish side won, as they kept the EUR/USD pair below 1.15. The weekly and monthly R1s at 1.1538, however, remain as key resistances for the moment. They are fuelled by the upper Bollinger band at 1.1552. While the daily technical studies are still mixed, there is a risk the pair is going to get stuck between the aforementioned resistance cluster and the weekly/monthly pivots and 20-day SMA at 1.1374 for some period of time.
- Traders’ Sentiment
Bullish portion of the SWFX market grew to 41% by Thursday morning. Meanwhile, pending orders are equally distributed between the bulls and bears in a 50-pip range from the current market price.
GBP/USD on the edge of falling under 1.45
“Given how important the services sector is to the UK economy we really need to see a decent number here or run the risk that we see a growth downgrade next week from the latest Bank of England inflation report.”
- CMC Markets (based on WBP Online)
- Pair’s Outlook
Despite a weak reading of the US ADP Non-Farm Employment Change yesterday, the Cable still edged lower, but managed to close on top of the 1.45 major level. The Sterling is now likely to rebound, with the nearest resistance located at 1.4563, represented by the weekly PP. Even though technical indicators are bolstering the possibility of the positive outcome, risks of the GBP/USD currency pair inching lower persist if the UK’s services sector data disappoints today. In case the bearish development prevails, the nearest area to prevent the Pound from falling lower will be the cluster around 1.4450.
- Traders’ Sentiment
Bulls grew stronger today, as 58% of all open positions are now long (previously 54%). At the same time, the portion of orders to acquire the British currency barely changed, now taking up 48% of the market.
USD/JPY struggles to retake 107.00
“There's no incentive to long dollar/yen.”
- Jeremy Cook, head of currency strategy at World First (based on Business Recorder)
- Pair’s Outlook
Upbeat US Services PMI data caused the Greenback to outperform the Japanese Yen on Wednesday, but with the exchange rate unable to move over the 107.00 psychological level. Technically, supply at this major level could trigger a USD/JPY sell-off, with the nearest support located around 105.35, namely the Bollinger band and the 20-month low. On the other hand, the pair managed to maintain a somewhat bullish trend since the beginning of the week, but with the 108.00 mark being the upper border for a possible rally today. Technical studies, however, are in favour of the bearish scenario.
- Traders’ Sentiment
For the second consecutive day 71% of traders hold long positions, whereas the portion of orders to purchase the US Dollar increased from 46 to 58% over the past 24 hours.
Gold fails at weekly PP, forced to rebound
“I think the (gold) market got a little carried away on the long side. At the moment we are just seeing some profit taking and consolidation around these levels.”
- Sydney-based precious metals trader (based on CNBC)
- Pair’s Outlook
Bearish traders attempted to prolong a correction as lower as possible yesterday, but they met a tough support in face of the weekly pivot point at 1,272.92. Considering that this demand is reinforced by the monthly pivot $20 from below, gold's bears decided not to take additional risks. The bullion's spot closed just under the 1,280 mark. Both daily and weekly aggregate technical indicators are pointing to a recovery, as there are no single signals to sell the metal. In the wake of these events, the bulls keep eyeing the 2015 peak at 1,307.06.
- Traders’ Sentiment
There has been a massive ten percentage points decline in the number of long positions opened in the SWFX market. At the moment only 29% of market participants are betting the precious metal is going to increase in price, down from 39% yesterday and 43% on Tuesday.
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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.
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