Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD still unable to violate 1.1260
“The failure of the economy to pick up speed over the summer will be a disappointment to the ECB, especially with job creation sliding to an eight-month low.”
- Markit (based on Bloomberg)
Pair’s Outlook
There have been four attempts to breach the 1.1260 mark (50% retracement) since Sep 24. However, all of them turned to be unsuccessful so far. Despite this fact, a decline of the Euro is also unlikely due to a dense cluster of nearby supports at 1.1160/22. Meanwhile, 55-day SMA has finally crossed the 200-day SMA, which implies a major swing in sentiment among market participants to the positive side. However, unless 1.1260 or 1.1122 levels are penetrated, the neutral outlook will remain largely intact with respect to EUR/USD.
Traders’ Sentiment
Distribution between bulls and bears is neutral on Tuesday morning. Alongside, the portion of long pending orders in 100-pip range from the spot increased from 43% to 50% in the past 24 hours.
GBP/USD anchored around 1.5150
“As Fed rate-hike expectations are pushed back, stocks and commodities saw a big rebound and eased risk aversion.”
- Sumitomo Mitsui Banking Corp (based on Business Recorder)
Pair’s Outlook
Although the Sterling tested the immediate resistance in face of the weekly R1, the worse-than-expected UK Services PMI reading pushed the GBP/USD back under the 23.60% Fibo. The Cable once again has the Fibonacci retracement on its path, which not only kept the pair from appreciating during the previous week, but is now also bolstered by the weekly PP. Immediate support, on the other hand, rests at 1.5111, namely the weekly S1; this area could prevent the Pound from falling deeper against the stronger on risk appetite US Dollar.
Traders’ Sentiment
The share of bulls returned to the last Monday’s level of 60% (down from 64%). The number of buy orders also declined, from 65 to 48%.
USD/JPY retests 120.63 fifth week in a row
“On the other hand, we expect September international securities flow data to show continued support for the USD/JPY from buying on weakness mainly by pension funds. The point on the pension flows is how the momentum of their buying will sustain in the coming months.”
- Deutsche Bank (based on FXStreet)
Pair’s Outlook
Despite trading limbo through most of the day, the US Dollar managed to climb almost 50 pips against the Japanese Yen on Monday. The Greenback should strengthen for the second day, but a potential resistance level, which kept the given pair from edging higher for almost five weeks now, lies on the way around 120.63. Furthermore, the resistance cluster around 120.80 could also play its part and even force the Buck to retreat to the 120.00 major level, also reinforced by the monthly PP.
Traders’ Sentiment
Although not as strong as yesterday, but market sentiment remains bullish at 70% (previously 74%). Meanwhile, the portion of commands to acquire the Buck dropped from 60 to 58%.
Gold consolidates above 50% Fibo at 1,134
“This week we think that some form of profit taking may occur after Friday's heady gains post-U.S. nonfarm payrolls.”
- Phillip Futures (based on CNBC)
Pair’s Outlook
Following massive price changes on Friday, the yellow metal was broadly unchanged in the beginning of a new working week. Gold has therefore secured the positive future outlook, by stabilizing above the 50% Fibonacci retracement of the Aug-Sep downtrend. While this level is reinforced by the 2014 low and weekly PP at 1,131/30, this fact increases the probability of XAU/USD's bullish scenario even more. The nearest resistance to meet is the 61.8% retracement and 100-day SMA at 1,142/43, followed by the monthly R1 at 1,147. Meanwhile, daily indicators are also pointing to the upside at the moment.
Traders’ Sentiment
After considerable gains at the end of the previous trading week, the number of long open positions has recently resumed declining. During the past 24 hours their share dipped from 53% to 52%.
This overview can be used only for informational purposes. Dukascopy SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.
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