Technical Analysis

EUR/USD keeps trading in tight range

EURUSD

“What actually changed the euro was that banks have a lending survey and for October it was very positive - only pointed out positives and so there's no need for the European Central Bank to increase quantitative easing.”

- Tempus Consulting (based on Reuters)

  • Pair’s Outlook

    Attempts to grow were undertaken by the EUR/USD currency pair on Tuesday. However, the momentum used to be weak enough in order to resume testing the closest resistance at 1.1392/95 (weekly PP; monthly R1). Therefore, the pair remains in limbo between the mentioned supply and support at 1.13 (20-day SMA; weekly S1). Even though daily indicators continue pointing strongly upwards, our short term expectation is fairly neutral with respect to EUR/USD for the moment.

  • Traders’ Sentiment

    The share of SWFX bullish open positions is unchanged at 45%. Meanwhile, percentage of pending orders to buy the Euro against the US Dollar in 100-pip range from the spot recovered back above the 50% threshold to reach the 55% mark.

GBP/USD to test 1.55 once more

GBPUSD

“Fearing a more dovish ECB message, we still like to be long pound-dollar and short euro-pound.”

- Citi (based on Bloomberg)

  • Pair’s Outlook

    Yet again the Cable’s volatility to the upside was limited by the 1.55 major level. Moreover, the pair was pushed slightly back, suffering a 21-pip loss, amid mixed US fundamental data results. Nevertheless, the GBP/USD keeps closing trade higher each day, with another rebound expected today, whereas technical indicators are bolstering this possibility with their bullish signs. The cluster around the 1.55 psychological level keeps providing resistance; a breakout today is unlikely to occur.

  • Traders’ Sentiment

    More traders now have a positive outlook towards the Sterling, as 55% of all positions are long (previously 53%). Meanwhile, the number of buy orders returned to its Monday’s level of 36%.

USD/JPY takes another crack at 120.00

USDJPY

“We see (dollar) selling when the dollar comes closer to ¥120. The dollar remains range-bound.”

- Tokyo Forex & Ueda Harlow Ltd. (based on Market Watch)

  • Pair’s Outlook

    The US Dollar appreciated against the Japanese Yen for the fourth day in a row, but was unable to pierce the resistance just under the 120.00 major level. Although the Greenback remains relatively strong and is outperforming the Yen in the hourly hours, risks of falling down persist. The 20-day SMA and the weekly PP are still a decent obstacle around 119.90. A breach of this level will doubtfully do any good for the USD/JPY, as a much stronger resistance cluster lies around 120.63, namely the area, which prevented the pair from rising higher for the past seven weeks.

  • Traders’ Sentiment

    Bulls keep gaining numbers, as 72% of traders are now long the Buck. The share of purchase orders now takes up 48% of the market.

Aug high provides strong support for gold

XAUUSD

“(But) a potential higher interest rate environment, better growth story into 2016, are strong fundamental drivers underpinning a bear gold story going forward.”

- OCBC (based on CNBC)

  • Pair’s Outlook

    In the beginning of Tuesday the yellow metal was actively testing the Aug high at 1,170, while a decline below this mark could expose the next demand as low as 1,155. However, the bullion revived later in the day to show confident gains up to the 200-day SMA at 1,175. Any movements around the long term moving average are important; however, we should observe a climb beyond 1,181 (monthly R2) in order to rehabilitate bullish expectations. A bounce back is therefore not completely off the table at the moment.

  • Traders’ Sentiment

    SWFX market sentiment with respect to the precious metal remained broadly unchanged for the past three weeks. Yesterday the bullish share added just one percentage point to 52%, but an advantage remains very negligible right now.

  Don't miss our new daily forecasts for EUR USDGBP USDUSD CAD and USD JPY!  

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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