GBP/USD upheld by 55-day SMA and monthly PP

Technical Analysis

EUR/USD to remain bearish

“We should brace for the euro breaking below key support at 1.34, given diverging U.S. and European monetary policies.”

- IG Securities (based on Reuters)

• Pair’s Outlook

  Although the Euro refused to decline for two days, in the end the bears managed to push the currency below the monthly S2 level. The current downward tendency is expected to persist and could eventually result in a drop down to 1.28, the 2013 lows, even though a half of the monthly technical indicators are presently pointing upwards. However, if EUR/USD does rally, the pair will most likely be stopped before it climbs over 1.36.

• Traders’ Sentiment

  The weekend did not introduce any changes into a slightly bullish sentiment towards EUR/USD, as 56% of open positions remain long. On the other hand, 50 pips from the spot the share of buy orders increased from 35% up to 45%.

GBP/USD upheld by 55-day SMA and monthly PP

“The bias is for the U.S. dollar to creep higher.”

- ANZ Bank New Zealand (based on Bloomberg)

• Pair’s Outlook

  GBP/USD is currently trying to find support in the face of the monthly PP and 55-day SMA, but there is a high probability of the price falling even lower. If this is the case, further depreciation of the Sterling will be obstructed by an even denser demand area at 1.69, formed by the 100-day SMA and 17-month up-trend. Considering the weekly and monthly studies, a test of this level may result in a substantial rally.

• Traders’ Sentiment

  The distribution between the bulls and bears is exactly the same as last Friday, when 37% of traders were expecting the Pound to appreciate and 63% were waiting for it to lose value. As for the orders, there is no difference between the ones to buy and sell.

USD/JPY prone to returning to 101

“The dollar will probably reach a peak against the yen in the first quarter next year, rather than year-end as we previously estimated.”

- Standard Chartered (based on Bloomberg)

• Pair’s Outlook

  The currency pair is facing strong resistance at the moment, which it might turn out to be unable to break. The longer-term technical indicators suggest sticking to a bullish outlook, but none of the key levels have been breached. Unless the U.S. Dollar rises above 102, the risks will be considered to be skewed to the downside. On the other hand, long-term bearish outlook will not be valid without the pair crossing the support line at 101 to the downside.

• Traders’ Sentiment

  The sentiment of the SWFX market with respect to USD/JPY is perfectly stable—74% of open positions are long, just as on Friday and five business days ago. Concerning the pending orders, 62% of them are set to purchase the Buck against the Yen.

USD/CHF aims for 2014 high

“Overall, we expect a relatively upbeat set of data releases, which ought to give the U.S. dollar further support over the week.”

- Barclays (based on CNBC)

• Pair’s Outlook

  The Greenback carries on strengthening, and there are supposedly no significant hurdles until this year’s high at 0.9156. We may expect some profit-taking around 0.91 (monthly R2), but the currency pair is likely to move another 100 pips North before there is a considerable risk of the bullish market turning around. Meanwhile, any dips should be prevented by 0.90, a mark, which has proven to be important to the market on several occasions in the past.

• Traders’ Sentiment

  At the moment 73% of the market participants believe the U.S. Dollar, despite its recent rise, is still undervalued, leaving the bears in a distinct minority. In the meantime, 100 pips from the spot there is no meaningful gap between the buy (49%) and sell (51%) orders.