EUR/USD looks for contact with 1.37

Technical Analysis

EUR/USD looks for contact with 1.37

“There’s little economic data that’s going to push the U.S. dollar around this week so it’s hard to see catalysts for it to move outside its recent range.”

- Commonwealth Bank of Australia (based on Bloomberg)

• Pair’s Outlook

  EUR/USD has nearly reached the 200-day SMA last week, but at the moment it is trading just above the 20-day SMA and weekly PP. Still, there are good chances the currency pair is going to attempt to test the resistance around 1.37 in the nearest future, since it has recently bounced off the support at 1.35, and monthly technical indicators are mostly bullish. On the other hand, it must be noted that the daily and weekly studies are currently bearish.

• Traders’ Sentiment

  There were no changes neither in the distribution between the long (46%) and short (54%) positions, nor between the buy (39%) and sell (61%) orders over the weekend, meaning the sentiment is neutral, but the selling pressure is likely to intensify if the volatility increases.

GBP/USD gains toehold above 1.70

“Sterling is a favorite right now, and the BoE seems to be the only major central bank that is likely to deliver on higher rates.”

- Nordea (based on CNBC)

• Pair’s Outlook

  Even though the major resistance has just been broken, the Cable remains hesitant to extend the rally. However, a majority of the daily and monthly indicators are giving ‘buy’ signals. Consequently, the pair should eventually gain upward momentum and then reach the upper boundary of the bullish channel at 1.74. But this path is going to be obstructed by some significant resistances, such as the monthly R2 and R3 at 1.7117 and 1.7238 respectively.

• Traders’ Sentiment

  The sentiment towards the British Pound is extremely bearish, being that three out of four SWFX market participants expect the currency to lose value against the U.S. Dollar. Concerning the orders, the share of the sell ones dropped from 66% to 59%.

USD/JPY remains anaemic

“Dollar-yen may break below the 200-day moving average and Japanese stocks may fall if the government’s renewed growth strategy disappoints.”

- Ueda Harlow (based on Bloomberg)

• Pair’s Outlook

  Although the 18-month up-trend line continues to keep USD/JPY afloat, the currency couple remains unable to gather enough strength to commence a robust recovery. The resistance the pair is continuously failing at consists of the 55, 100 and 200-day SMAs, but there is also a supposedly dense supply area around 103—it is reinforced by the monthly R1. Accordingly, the buck needs to overcome these levels to confirm its long-term bullish intentions.

• Traders’ Sentiment

  A substantial portion of the traders, namely 74% of them, remain convinced the greenback will outperform the Japanese Yen. In the meantime, the percentage of buy orders increased from 62% to 66%.

USD/CHF faces elevated downside risks

“The dollar has moved up with higher U.S. yields.”

- TD Securities (based on Reuters)

• Pair’s Outlook

  USD/CHF was close to violating the support represented by the 200-day SMA last week, but in the end it managed to stay above 0.8938. However, the monthly indicators are still pointing downwards, suggesting the bears are soon going to take control of the market and push the exchange rate south, towards the 55-day SMA at 0.8918/04. At the same time, if the recent highs near 0.90 are overcome, 0.9160 could become the next target.

• Traders’ Sentiment

  Right now the percentage of long positions stands at the same level as last Friday, specifically at 65%. Speaking of the pending orders, the same portion of them (65%) is placed to purchase the U.S. Dollar against the Franc.