EUR/USD bounces back from down-trend

Technical Analysis

EUR/USD bounces back from down-trend

“To the extent that whatever movements in the dollar take place and then there's some level of stability, that change in import prices unwind.”

- Charles Evans, Chicago Fed President (based on CNBC)

• Pair’s Outlook

  As expected, the EUR/USD failed to push itself through a major resistance area around 1.1050, comprised of monthly S1, weekly R1 and long-term downtrend line. Moreover, it seems that the latter level had the most impact on the pair yesterday. As a result, the common currency plunged below monthly S2 to reach 1.09. At the moment, there are no supports to energize the Euro until weekly PP at 1.0773; therefore, a decline towards this level can currently be expected to take place.

• Traders’ Sentiment

  Bullish opened positions at the SWFX market are accounting for 43% this morning. Additionally, pending orders to buy the Euro against the US Dollar in 100-pip range from the spot account for 39% .

GBP/USD surprised to the downside

“We expect the current USD correction to be relatively short-lived.”

- Analyst at ANZ (based on Reuters)

• Pair’s Outlook

  Yesterday, the Cable retreated in spite of all the fundamental factors. GBP/USD tested the 2013 low, which stopped the pair from falling deeper. Moreover, Wednesday’s gains were completely negated. The technical studies proved to be more reliable, and right now they are pointing south, suggesting a further slump. The Sterling can easily reach the 2013 low; however, the level at 1.48 is unlikely to be pierced.

• Traders’ Sentiment

  Market sentiment remains unchanged, with 46% of positions being long. At the same time, the gap between the buy and sell orders narrowed, as 47% (previously 40%) of commands in the 100-pip range are set to acquire the Pound.

USD/JPY: a rebound is nigh?

“We think low and falling real rates are likely to keep euro zone and Japanese investors focused on selling their currencies into rallies, and we expect the USD to benefit.”

- Analysts at BNP Paribas (based on CNBC)

• Pair’s Outlook

  On Thursday the US Dollar dipped despite the better-than-expected Jobless Claims data. The Greenback tested a support cluster around 119.00, but lacked the strength to penetrate the barrier and, as a result, USD/JPY settled at 119.16. Through Friday the Buck is likely to rebound, as it is on the edge of the strong support cluster. The rally might extend to 119.60, unless the fundamentals disappoint later today. Nearest resistance lies at 120.27, represented by the weekly PP.

• Traders’ Sentiment

  The share of long positions grew even further, as 67% of traders have a positive outlook towards the Dollar. Meanwhile, the number of buy orders decreased, from 69 to 58%.

XAU/USD attempts to breach weekly R2

“Gold prices rallied on safe-haven buying on concerns of geopolitical tensions as Saudi Arabia began air strikes in Yemen.”

- Australia & New Zealand Banking Group Ltd. (based on Bloomberg)

• Pair’s Outlook

  Yesterday, the yellow metal tried to pierce through two major supply zones and register considerable daily gains. However, the bullion was stopped by these levels at 1,209 (100-day SMA) and 1,216 (weekly R2), respectively. However, it did not prevent Gold from consolidating above the Jan-Mar down-trend line and weekly R1 at 1,205 by the end of day. It is still likely to make the second attempt to develop further to the north, while in case of failure a sell-off will be almost inevitable with the short-term target at 1,190-1,195.

• Traders’ Sentiment

  Sentiment towards the precious metal is optimistic among SWFX traders as the total share of bullish positions (66%, +2% since Thursday) has a strong advantage over the bearish ones at the moment.