EUR/USD retreats from 1.3350

Technical Analysis

EUR/USD retreats from 1.3350

“There are more people who are thinking the euro will fall, even though such positions have been piling up.”

- Barclays (based on MarketWatch)

• Pair’s Outlook

  The support at 1.3350 proved to be significant last week by keeping the Euro away from 2013 Q4 low. Still, we are likely to see a test of 1.33 before there is an upward correction to 1.35, which a cluster of various resistances, including the three-month down-trend and monthly PP. Right now this course of events is also supported by the technical indicators, with weekly and daily being bearish and monthly studies pointing North.

• Traders’ Sentiment

  After being slightly bullish for a while the sentiment returned to being neutral once again—53% of positions are long and 47% are short. Meanwhile, a majority of the orders is placed to sell the Euro against the Buck, namely 58% of the total.

GBP/USD tests monthly S1

“U.S. dollar-long positioning still seems to be a favorite of the market, and that’s all coming from the U.S. data.”

- ANZ (based on Bloomberg)

• Pair’s Outlook

  GBP/USD has just hit the monthly S1, and if the bears keep forcing the pair to go lower, there are also the 200-day SMA and May low that are ready to help the Sterling. Given a large number of important levels underneath the spot, there is a high possibility the sell-off may soon discontinue without crossing 1.67. The upside risks are at the same time implied by the monthly technical indicators, as five of them are bullish.

• Traders’ Sentiment

  There are currently more long positions than short ones in the market—the share of the former is 61%. At the same time there are more commands placed to acquire the British Pound than to sell the currency—59 and 41% respectively.

USD/JPY underpinned by long-term up-trend

“Geopolitical issues in different parts of the world are going much further than anyone expected.”

- CitiFX (based on Reuters)

• Pair’s Outlook

  As turned out, USD/JPY required assistance of the major rising trend-line at 101.53 in order to preserve chances to rally. And even though on the daily and monthly time-frames the currency pair is supposed to be moving North, it fails to start a recovery and finally gain a foothold above the 200-day SMA. This would supposedly give the U.S. Dollar confidence to surpass the recent highs at 103 and then challenge the 2014 Q2 high at 101.42.

• Traders’ Sentiment

  Nearly three fourths (73%) of the market participants are expecting the U.S. Dollar to outperform the Japanese Yen in the future. There is also a large portion of buy orders set 100 pips around the spot price—61%.

USD/CHF to stay above 0.90

“The conclusions from the weekend are that conflicts are cooling, and the risk-off events of the past two weeks may see upside risk as de-escalation spreads across the conflicts.”

- IG (based on CNBC)

• Pair’s Outlook

  The Greenback remains below 0.91, the last hurdle that needs to be overcome to reach this year’s high. The daily indicators are currently supportive of such a bullish scenario, but the longer-term signals are not as encouraging, meaning 0.9150 may in the end stay intact. On the other hand, a path of the least resistance is to the upside, considering there are monthly PP, 200-day SMA and five-month up-trend supporting the currency at the moment.

• Traders’ Sentiment

  The advantage of the longs grew even further over the weekend, being that their share went from 71 up to 75% after the U.S. currency had become cheaper. As for the orders, 58% of them are to buy and 42% are to sell the Buck.