GBP/USD may re-test Feb high

Technical Analysis

EUR/USD probes monthly PP

“Draghi has his sight set squarely on the euro.”

- DailyFX (based on MarketWatch)

• Pair’s Outlook

  EUR/USD did not manage to close a downside gap yesterday, instead at the moment it gravitates towards the monthly pivot point at 1.3815. Additional support is at 1.3789/83, created by the 20 and 55-day SMA. But the currency pair is likely to go lower, in the direction of the up-trend support line at 1.37, even though most of the technical indicators on the weekly and monthly time-frames are pointing upwards.

• Traders’ Sentiment

  Although the relative amount of short positions in the market declined, there is still a significant difference between the bulls (34%) and bears (66%) and the sentiment therefore remains bearish towards EUR/USD.

GBP/USD may re-test Feb high

“Investors' love affair with the UK is still not over.”

- IronFX (based on Reuters)

• Pair’s Outlook

  Though the Cable has just encountered the Feb high, the sell-off from this level turned out to be short-lived. Accordingly, if the weekly PP at 1.6704 stays intact today, there will be an elevated chance of a re-test of 1.6822. Should this resistance give in to the buying pressure, the 2009 high at 1.70 will be exposed. However, given that it is reinforced by the weekly and monthly R2 levels, further advancement will be difficult.

• Traders’ Sentiment

  There was no activity observed on the part of the exchange rate, but the portion of traders expecting the Pound to lose value diminished, namely from 60% to 58%. Meanwhile, the share of buy orders soared from 55% up to 69%.

USD/JPY confirms support at 101.29/19

“The dollar was bought on the back of the stronger-than-expected retail sales numbers. If the data continue to print relatively firm, the dollar could claw back all its losses from last week.”

- Sumitomo Mitsui Banking (based on Bloomberg)

• Pair’s Outlook

  The support area around the level of 101.29/19 proved to be of great significance to the market, as it has once again prevented further depreciation of the U.S. Dollar. Now, after a small rebound, USD/JPY faces a tough supply zone, which consists of the falling trend-line and 55-day SMA. Potential extension of the rally beyond this point, which seems to be a viable scenario at the moment, will involve an attack on 102.96/72 (monthly PP and 100-day SMA).

• Traders’ Sentiment

  The distribution between the long and short positions stays perfectly unchanged—73% of open positions are long and the remaining 27% are short. On the other hand, the percentage of buy orders plummeted from 73% down to 63%.

USD/CHF rises to monthly pivot point

“The generally positive incoming data was enough to reverse some of the safe-haven bid from the pick-up in geopolitical risks over the weekend.”

- Barclays (based on CNBC)

• Pair’s Outlook

  Despite the bearish outlook implied by the weekly and monthly technical studies, USD/CHF turned around ahead of the monthly S1 and it is now challenging the monthly PP. In case this resistance fails to contain the pair, there is another potential ceiling at 0.8839 (20 and 55-day SMAs), which is supposed to ensure that the buck is eventually going to descend to the lower down-sloping trend-line of the falling wedge.

• Traders’ Sentiment

  Just as yesterday, a substantial majority (72%) of the SWFX market participants expect the U.S. Dollar to outperform the Swiss Franc. And the demand is likely to grow, since 65% of orders are to purchase the buck.