GBP/USD stands in proximity to Feb high

Technical Analysis

EUR/USD stays calm

“The euro, if given the chance, tends to rise. The only really effective measure to counter the currency's strength would be quantitative easing.”

- Praevidentia Strategy (based on CNBC)

• Pair’s Outlook

  Thin liquidity does not allow the currency pairs to gain momentum, and EUR/USD is no exception. However, considering that a substantial majority of the technical indicators continue pointing north, this particular instrument possesses an upward potential and could start a recovery as early as tomorrow. Still, the rally should not be able to surpass the key resistance at 1.39, namely the long-term down-trend.

• Traders’ Sentiment

  The distribution between the bullish and bearish market participants is virtually unchanged since the last report—33% of positions are long and 67% are short. On the other hand, the share of orders to sell the Euro plummeted from 65% down to 54%.

GBP/USD stands in proximity to Feb high

“The broad picture for sterling is pretty constructive.”

- Commerzbank (based on Reuters)

• Pair’s Outlook

  GBP/USD stays dangerously close to the February high. Moreover, most of the technical studies are giving ‘buy’ signals, suggesting the supply at 1.6822/14 is not going to manage to stop the currency pair from advancing further. If this resistance is breached, despite being reinforced by the monthly R1, then the 2009 highs at 1.70, which are currently guarding the upper trend-sing line of the bullish channel, are to become the next target.

• Traders’ Sentiment

  The percentage of bears in the market is not returning to more familiar levels, but stays elevated at 71%, meaning the sentiment is strongly negative. At the same time, 62% of orders placed 100 pips from the spot price are to sell the Sterling against the buck.

USD/JPY preserves upward momentum

“We’re likely to shift to a dollar strength story from a yen weakness story going forward as we start to see good data from the U.S.”

- FX Prime (based on Bloomberg)

• Pair’s Outlook

  USD/JPY stays bullish, even though it is presently facing a series of tough obstacles. Apart from the monthly PP at 102.72 representing the immediate resistance, there is also the 100-day SMA nearby. However, if both of these levels are broken, the U.S. Dollar will be well-positioned for a rally towards 103.43/40. Meanwhile, further appreciation of the currency, should it take place, is likely to make a pit stop near the monthly R1 at 104.25.

• Traders’ Sentiment

  The bulls have even further enhanced their advantage over the bears, as the portion of the former surged to 75% from 70% seen last Friday. In the meantime, the difference between the amounts of buy (54%) and sell (46%) orders is not considered to be significant.

USD/CHF prone to falling

“If we think that the Fed will be seeing its goals achieved by the end of 2016, there may be a strong argument for not beginning rate normalization until then.”

- BNY Mellon (based on MarketWatch)

• Pair’s Outlook

  The resistance at 0.8835/28, consisting of the 20 and 55-day SMAs, cooled the appetite of USD/CHF after it violated the monthly pivot point and now the exchange rate is drifting sideways. The risks at the moment are skewed to the downside, being that the pair is close to the upper boundary of the one-year rising wedge and the technicals are largely implying poor performance of the greenback both in the short and long run.

• Traders’ Sentiment

  Three out of four SWFX market participants expect the Dollar to gain value relative to the Franc, which is a four percentage point increase from the previous report’s figure of 71%. Meanwhile, the buy orders gradually crowd out the sell ones (fell from 65% to 57%).