EUR/USD gains toehold above monthly PP

Technical Analysis

EUR/USD gains toehold above monthly PP

“The 50-day moving average is the next chart point to watch out for on the topside.”

- Faros Trading (based on Bloomberg)

• Pair’s Outlook

  A group of resistances that gathered around the monthly pivot point at 1.3630 failed to prevent appreciation of the Euro against the U.S. Dollar. The currency now appears to be in a good condition to advance further north, towards the 100 and 200-day SMAs. Nevertheless, the pair will be expected to turn around at 1.37 and then test a 24-month up-trend line at 1.3563/47, which currently guards the support line at 1.35.

• Traders’ Sentiment

  The bears keep a slight advantage over the bulls, but for now the difference if far from being significant—only 12 percentage points. As for the orders, the share of the buy ones has surged from 41% to 52% since the previous report.

GBP/USD underpinned by weekly PP

“If you get growth disappointments in the UK, it delays when they hike, but if you get growth disappointments in the euro zone, it increases the chances of QE.”

- HSBC (based on Reuters)

• Pair’s Outlook

  For the time being the weekly PP seems to be providing enough support for the Cable to stay afloat. On the whole the technical indicators are also implying good performance by the Sterling, but the currency lacks momentum to continue its recovery. Ideally, the price should climb over the monthly R1 at 1.7248 and then seek contact with the upper boundary of the bullish channel, which stands together with the monthly R2 at 1.74.

• Traders’ Sentiment

  The distribution between the bullish and bearish SWFX market participants is perfectly the same as yesterday—26% of them expect appreciation of the British Pound and 74% believe in an alternative scenario.

USD/JPY probes long-term up-trend

“Fears of a more hawkish Fed are being priced out.”

- Societe Generale (based on Bloomberg)

• Pair’s Outlook

  At the moment USD/JPY is testing the 16-month up-trend, a breach of which will most likely entail a sell-off down to the support line at 101. However, considering that most of the monthly technical studies are bullish, either the immediate support or the next one have a good chance of initiating a robust recovery, something that was absent the past two quarters. In case of a rally the first resistance is going to be the monthly PP and 55-day SMA.

• Traders’ Sentiment

  The percentage of longs (71%) continues to fluctuate around its 10-day average (72%), which serves as evidence in favour of stability of bullish sentiment with respect to USD/JPY. The buy orders are also in majority, but with 67% of the total amount of commands.

USD/CHF disrespects monthly PP and 200-day SMA

“The market had likely positioned for a hawkish tone to the minutes given the upward revisions to Fed rate forecasts.”

- Barclays (based on CNBC)

• Pair’s Outlook

  The monthly pivot point and 200-day SMA have once again proven to be of no particular interest to the market, as both of them were violated yesterday. Now it is 100-day SMA’s job to stop the pair, as it did early April and late June. In the meantime, the technical studies suggest an elevated chance of a prolonged decline from the current trading levels—four out of eight indicators on the monthly chart are pointing downwards.

• Traders’ Sentiment

  An overwhelming majority of the SWFX market participants, namely 74% of them, are planning to profit from an increase in the value of the greenback relative to the Franc. And the buying pressure may even intensify, since 65% of orders are set to purchase the buck.