EUR/USD stays glued to 1.29

Technical Analysis

EUR/USD stays glued to 1.29

“We’re still looking for a stronger and supported U.S. dollar over time. You are seeing a general pickup in economic growth.”

- National Australia Bank (based on Bloomberg)

• Pair’s Outlook

  The Euro continues to trade flat, being unable neither to break the support at 1.29 nor to decouple from it and challenge some of the nearby resistances. However, in the end the bears are expected to gain the upper hand and push the price lower from here, though they might have difficulties crossing the 2013 low at 1.2750, which is likely to prove to be a tough level. But if it is broken, there will be a high chance of the sell-off extending to the 2012 low at 1.2050.

• Traders’ Sentiment

  The distribution between the long and short positions is the same as yesterday—58 an 42%, respectively. But the advantage of the sell orders over the buy ones has increased from 26 to 34 percentage points over the last 24 hours.

GBP/USD bounced off 1.6250

“A ‘yes’ vote for independence would be cataclysmic. I expect that the impact on the pound would be swift and severe.”

- Marshall Gittler, IronFX Global (based on MarketWatch)

• Pair’s Outlook

  As GBP/USD has just confirmed the resistance at 1.6250, the Sterling should lose some ground in the nearest future. The first target will be the support at 1.61, represented by the monthly S3 level. Then, if the bears remain active, the 2013 Q4 low at 1.5850 will become the next objective. But in the long-term perspective, given the current downward momentum, the rate may attempt to re-test the 2013 low at 1.48.

• Traders’ Sentiment

  The gap between the two camps is slowly narrowing, but there are still a lot more bulls (61%) than there are bears (39%). At the same time, the amounts of buy and sell orders placed 100 pips from the spot price are equal—51 and 49%, accordingly.

USD/JPY makes a pause

“There's some degree of profit-taking and there's also some degree of stabilization or consolidation.”

- Standard Chartered Bank (based on CNBC)

• Pair’s Outlook

  USD/JPY is presently taking a break to gather strength before conquering 108 and thereby opening a path towards the 2008 high at 110.50. In case of a correction the currency pair should be underpinned by the two-month up-trend at 106, where it is reinforced by the monthly R2, weekly S1 and 20-day SMA. If the demand here is not enough to prevent development of a decline, the Buck may fall down to 103 before resuming a recovery.

• Traders’ Sentiment

  The distribution between the longs and short is currently skewed in favour of the latter that constitute 68% of the market (72% yesterday). As for the orders, 62% of the commands are set to purchase the Greenback against the Yen.

USD/CHF retains bullish outlook

“At Wednesday's FOMC meeting, changes to Fed forecasts and wording that reflects expectations that rates could go higher sooner than expected should provide support to the U.S. dollar.”

- Barclays (based on CNBC)

• Pair’s Outlook

  Though the U.S. Dollar is hesitant to appreciate at the moment, the market is bullish—since May the pair has already covered seven figures. The consolidation that emerged after the accelerated advancement should eventually give way to a long-term recovery, which in turn has the potential to result in a rally to the 2013 just above 0.98. However, the monthly technical indicators are mostly against such a scenario—four out of eight are bearish.

• Traders’ Sentiment

  There are only marginal changes in the sentiment of the SWFX market towards USD/CHF—54% of open positions are long. There is a little more volatility among the pending orders—the share of the buy ones fell from 62 to 59%.