Gold continues to fall on Wednesday

Technical Analysis

EUR/USD breaks out of pattern on Wednesday

"Seesaw price action since the beginning of the week seems to reflect pre - positioning ahead of a much - anticipated speech from Fed Chair Janet Yellen at the Jackson Hole Symposium on Friday."

 - Ilya Spivak, Currency Strategist (based on Daily FX)

• Pair 's Outlook
  The common European currency had been trading against the US Dollar in a channel upward pattern since July 4, and the pair broke out of the pattern on early Wednesday morning. The currency exchange rate reached the monthly R2 at 1.1353 on Tuesday, as it was forecasted. However, the rate bounced off the monthly R2 and began a decline. At the moment, it is most likely that the currency pair will continue to fall until it reaches the weekly PP at 1.1281 and monthly R1 at 1.1263, which will provide support.

• Traders' Sentiment
  SWFX traders mark the third consecutive session of unchanged bearishness, as 63% of open positions are short on Wednesday morning. In the meantime, pending commands are 55% short.

GBP/USD to make a U-turn

"Despite the already meaningful fall, and very cheap valuation levels, we still look for more sterling downside in coming months, both against the euro and the dollar."

- ING (based on Business Recorder)

• Pair's Outlook
  The US Dollar was dragged down by a poor reading of the Manufacturing PMI on Tuesday, allowing the Sterling to take the upper hand and breach the monthly PP resistance level. As a result, the Cable reached the 1.32 major level, where supply was sufficient to limit the rally. The GBP/USD pair is now expected to make a U-turn, ignoring the monthly PP, which is now providing support. Potentially, the bearish momentum today could last until the Pound touches the 20-day SMA on top of the 1.31 mark, although a close around 1.3140 is the base case scenario.

• Traders' Sentiment
  Bears are now in the majority, taking up 53% of the market, compared to 46% on Tuesday. Meanwhile, the portion of orders to sell the Cable increased from 59 to 61%.

USD/JPY on the edge of falling under 100.00

"The currency market remains highly skeptical of any Fed tightening and the greenback remains under pressure across the board."

- BK Asset Management (based on Business Recorder)

• Pair's Outlook
  The Greenback managed to remain above the 100.00 major level on Tuesday, ultimately closing with an eight-pip loss. The US Dollar is expected to be exposed to more weakness today, as price once again opened just under the weekly PP, where supply is strong. However, the 100.00 mark remains a tough support, which will be difficult to pierce. Provided there is sufficient impetus, the USD/JPY currency pair could fall towards 98.75, where the weekly S2, the monthly S1 and the Bollinger band form an even stronger demand area. Technical indicators are bolstering the possibility of the negative outcome today, as they retain bearish signals.

• Traders' Sentiment
  Both bullish market sentiment and the share of buy orders remain unchanged, taking up 67% and 54% of the market, respectively.

Gold continues to fall on Wednesday

"Gold price bounced off the 61.8% Fibonacci retracement and is back testing the broken triangle area at $1,340-50."

- Alexandros Yfantis, portfolio manager and trader (based on investing.com)

• Pair's Outlook
  The yellow metal is in its fourth consecutive session of losses, as it continues to bounce around the 1,340 level. The metal is forced to move downwards due to the fact that the 20-day SMA at 1,339.79 is pressuring it to move lower. However, it can only continue up to the moment, when the bullion reaches the support level below at 1,331.76, which is represented by the weekly S1. In the previous two sessions, the metal bounced between the newly formed weekly S1 and a compound resistance made up of the weekly and monthly pivot points near the 1,345 level.

• Traders' Sentiment
  Traders continue to be bearish on the yellow metal, as 53% of open positions are short on Wednesday. In the meantime, pending commands are 57% long.

 

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