EUR/USD puts pressure on 1.3350

Technical Analysis

EUR/USD trades within 100-pip range

“We see little scope for positive domestic news for EUR/USD, with GDP data in particular looking vulnerable to a negative surprise. We remain short with a $1.32 target.”

- BNP Paribas (based on CNBC)

• Pair’s Outlook

  The currency pair remains trapped between 1.3450 and 1.3350, as neither bulls nor bears are able to push the price in any direction. Still, EUR/USD is considered to be inclined to move lower, towards 1.33, where the 2013 Q4 low merges with the monthly S1 level. From there the Euro could try to launch an attack on the 2013 September low at 1.31. But for this scenario to be valid, the resistance at 1.35 (down-trend and monthly PP) must stay intact.

• Traders’ Sentiment

  The sentiment of the SWFX market is neutral with respect to EUR/ USD, being that 54% of traders are long and 46% are short on the pair. Similarly, there is no significant difference between the shares of buy (51%) and sell (49%) orders.

GBP/USD pierced through major supports

“Sterling could eventually drop to levels around $1.6500.”

- Praevidentia Strategy (based on CNBC)

• Pair’s Outlook

  A bullish scenario did not transpire, as the price bounced off the weekly PP and plummeted through some of the major supports (monthly S1 and 200-day SMA) on the back of softer BoE rhetoric. Right now the Pound is trading near the May low and seems to be willing to extend the recent losses. If this is the case, GBP/USD will be expected to travel four and a half figures South over the coming months and eventually meet this year’s low at 1.6250.

• Traders’ Sentiment

  There has been a slight increase in the percentage of long positions, namely from 59 to 61%. At the same time the share of buy orders placed 50 pips from the spot soared from 51 to 71%, as the price of the Sterling noticeably declined.

USD/JPY’s bullish momentum gains traction

“Dollar-yen is looking solid. The pair has broken out of the triangle pattern, so if we see a bottom form around the 102 level, it could extend a little higher. The break above the key resistance at 103 yen, near the highs in May, late July and early August, would be a buy signal.”

- Gaitame.com (based on Bloomberg)

• Pair’s Outlook

  Though the daily technical indicators are no longer bullish like the monthly studies, but are rather mixed, the U.S. Dollar keeps gaining ground against the Yen. The 200-day SMA at 102.40 seems to be already out of the way, meaning we could soon see a re-test of the July highs. Should this resistance at 103 be broken, the next target will be the monthly R1 level at 103.50, followed by the 2014 Q2 high at 104.

• Traders’ Sentiment

  The portion of bulls in the market stays above 70%, meaning the sentiment is strongly bullish towards USD/JPY and traders expect the Buck to appreciate. There are also significantly more buy orders (61%) than the sell ones (39%).

USD/CHF still consolidating between 0.9100 and 0.9050

“Among the major currencies, the U.S. dollar has the most room to rally at the moment.”

- U.S. Forex (based on Reuters)

• Pair’s Outlook

  Just as yesterday or earlier this August USD/CHF’s efforts to resume advancement are fruitless—the resistance at 0.91 continues to act as a ceiling and is not letting the pair to re-visit this year’s high. However, it is too early to claim that the bullish momentum is no longer topical and that we are about to witness a reversal. There is still a large number of supports between 0.90 and 0.89 ready to help the Greenback to recover.

• Traders’ Sentiment

  Despite the exchange rate staying calm, the distribution between the longs and shorts became even more skewed in favour of the former—75%. And the buying pressure may only increase, being that 83% of pending orders are to purchase the Greenback.