USD/JPY to rebound from 200-day SMA

Technical Analysis

EUR/USD to stay beneath 1.35

“The trend in euro is clearly down, and we think that story’s got further to run.”

- Westpac Banking (based on Bloomberg)

• Pair’s Outlook

  Although the U.S. Dollar weakened because of the Friday’s data, none of the significant resistances have been broken, meaning the downward trend is likely persist nonetheless. Moreover, most of the daily and weekly technical indicators are pointing South. Even if the Euro extends the rally, as suggested by some of the monthly studies, there is a tough supply zone at 1.3500/1.3478 the currency is considered to be unable to break for now.

• Traders’ Sentiment

  While for some time the bullish market participants were growing in numbers, over the weekend their share dropped from 59% to 52%, making the difference between them and the bears insignificant once again.

GBP/USD targets monthly S1

“The dip below $1.69 this week sends a strong warning signal that a much deeper setback towards $1.6394 could be looming.”

- JP Morgan (based on Reuters)

• Pair’s Outlook

  The Greenback underperformed relative to most of its main counterparts last Friday, but it nonetheless managed to gain more ground against the Sterling. If this tendency continues, the support at 1.6768/59 (weekly and monthly S1) may soon come into play, but an upward correction is more likely to start a little lower, near 1.67, where the 200-day SMA merges with the May low. Meanwhile, a majority of the monthly indicators is bullish.

• Traders’ Sentiment

  Five days ago a substantial part of the traders was expecting the Pound to lose value (63%), now the same amount is in favour of it appreciating against the Dollar—62%. The market is probably waiting for an upward correction.

USD/JPY to rebound from 200-day SMA

“This week has really set the tone for the summer. Investors should look to sell the euro and the yen against the dollar.”

- Bank of New York Mellon (based on Bloomberg)

• Pair’s Outlook

  USD/JPY took a severe blow from the resistance around 103 at the end of the last week, but the Buck should be underpinned by the demand at 102.49/46 (weekly PP and 200-day SMA). Here the currency pair is in a good position to resume its journey North, namely towards the high just above 104. At the same time the technical indicators on all three relevant time-frames are also showing their support for a surge in the price.

• Traders’ Sentiment

  Despite the U.S. Dollar getting more and more expensive, there are no notable changes in the sentiment of the market, which remains distinctly bullish, with more than 70% of open positions being long, namely 72% right now.

USD/CHF stepped away from 0.91

“The ISM [Institute for Supply Management] reflects underlying strength in the U.S. economy.”

- TD Securities (based on CNBC)

• Pair’s Outlook

  The pair retreated some 30 pips after an impressive bullish run from Jul 15, but managed to stabilise before falling down to 0.90. Given that the near-term indicators are bullish, soon we are likely to see a re-test of 0.91. The 2014 high at 0.9156 should become the subsequent objective. If the latter resistance is overcome as well, the bulls will be expected to push the rate towards 0.9251, the current location of the 2013 Nov 7 high and monthly R2.

• Traders’ Sentiment

  Similarly to the situation in USD/JPY, here the bulls also dominate the market by taking up 72% of it, which is only slightly below the 10-day average of 73%. As for the orders, as many as 67% of them are to purchase the Dollar against the Franc.