EUR/USD approaches weekly R1

Technical Analysis

EUR/USD approaches weekly R1

“They’re moving toward more, but the ‘what’ has not actually been defined, and the Governing Council seems quite divided. It would be quite difficult to hit their target of expanding the balance sheet by 1 trillion euros without including government bonds.”

- ABN Amro Bank NV (based on Bloomberg)

• Pair’s Outlook

  On Wednesday, the EUR/USD currency pair gained value for a third day in a row, as the single currency reached the weekly R1 at 1.2532. However, this level together with the long-term downtrend line stopped the pair’s increase, and it was forced to give up the idea of breaching this level. It is worth pointing out that daily technical indicators changed from bearish to neutral, meaning that the Euro still has a chance to advance and cross the mentioned resistance.

• Traders’ Sentiment

  The gap between long and short positions widened during past 24 hours, while at the moment bulls take up around 53% of all opened positions on the SWFX market. Meanwhile, pending orders in both 50 and 100-pip ranges improved as well.

GBP/USD rises up to 1.58

“Our respondents are overwhelmingly calling for growth in Black Friday sales, and they believe in the continued importance of these numbers as a window into retail and the wider economy.”

- ConvergEx (based on CNBC)

• Pair’s Outlook

  Similar to the EUR/USD cross, the Cable reflected the yesterday’s weakness of the US dollar and moved to the north. The pair crossed the 1.58 major and neared the weekly R2 four pips higher. At the same time, this level is strengthened by monthly S1 from above, meaning that the task to breach this line will be difficult. For now we assume the Pound is going to oscillate below this important resistance and continue gaining more bullish momentum.

• Traders’ Sentiment

  The advantage of bulls over bears decreased considerably since Wednesday. Right now only 55% of all positions on the pair are long (61% yesterday). On the other hand, pending orders in 100-pip range from the spot returned back to the green zone (55% of all).

USD/JPY’s decline stopped by monthly R2

“While they [manufacturing jobs] are rebounding in numbers, which is good news, they are not delivering on the wages front.”

- NELP (based on CNBC)

• Pair’s Outlook

  It seems that the USD/JPY currency pair decided to start moving away from the 118 major level, around which it hovered for past five days. As the decision was taken in favour of US dollar’s decline, the pair was immediately stopped by the weekly R1 and monthly R2 at 117.30. For the time being the continuation of a downtrend looks highly unlikely, taking into account these strong supports and bullish technical studies in short and medium-term.

• Traders’ Sentiment

  Distribution between bullish and bearish positions on the SWFX market remains unchanged for a third consecutive day. At the moment the former take up 52% of them and the latter are in a slight minority with 48% of all opened positions.

USD/CHF fell below 0.96

“Momentum is weakening in the fourth quarter. While there is no reason to be pessimistic, it curbs some of the enthusiasm we had seen after the strong growth of the past two quarters.”

- Standard Chartered (based on Reuters)

• Pair’s Outlook

  After a decline below the weekly pivot point at 0.9645, the USD/CHF pair made an attempt to return back above this resistance level. However, it failed to so successfully and dropped even more. For some time the pair hovered below the 0.96 major level, but closed 11 pips above it. We predict the bearish trend to persist in the nearest future, while the decline may prolong down to monthly pivot point at 0.9556. This idea is shared by daily technical studies.

• Traders’ Sentiment

  Market sentiment continues to be strongly bullish, as 60% of all opened positions are long (63% yesterday). Meanwhile, pending orders deteriorated in both ranges, as now only 52% of them are set to acquire the US dollar in 100-pip range from the current price.