Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD sets eye on recent lows at 1.09
“If we get good numbers this week, and we get more hawkish comments, then I think the dollar will resume some of its strength.”
- Mizuho Bank Ltd. (based on Bloomberg)
Pair’s Outlook
EUR/USD pierced through the weekly PP at 1.0998 yesterday, thus reopening the next support zone for bears. They are going to focus on the 1.09 level, which is guarded by the weekly S1 and Oct 28-29 lows. Success here will allow for a sell-off to extend down to the 1.08 area in the nearest future, where May/July lows coincide with the weekly S2. Alongside, rallies are still expected to be capped by the up-trend and 200-day SMA at 1.1070 and 1.11, respectively. On Wednesday EUR/USD's movements will highly depend on a bunch US statistics including the ADP employment report.
Traders’ Sentiment
Bulls regained the majority of open positions in the SWFX market, namely 51% of them, while commands to buy the Euro in 100-pip range from the spot climbed from 39% to 48%.
GBP/USD risks falling under 1.54
“But I think the market is focused on (the fact that) yields keep rising in the U.S., and that's leading to expectations for (nonfarm) payrolls on Friday and more expectations of the Fed and U.S. growth. And what we do see for U.S. growth is consumption remains quite strong.”
- Citigroup (based on Reuters)
Pair’s Outlook
Even though the Sterling appreciated against the US Dollar, the pair gained only four pips. The tough cluster around 1.5360 helped the Cable to recover from intraday losses and remain afloat. A breach of the given demand area is likely to trigger a sell-off all the way towards the up-trend (currently around 1.5210), in which the GBP/USD has been trading since April. Meanwhile, the 100-day SMA keeps providing immediate resistance around 1.5475, but is unlikely to be reached, as the 55-day SMA is on the edge of breaching the 200-day one, thus, triggering a sharp decline in the medium-term.
Traders’ Sentiment
The distribution between bulls and bears is now equal to one, whereas the number of buy orders recovered, rising from 53 to 65%.
USD/JPY keeps testing the 200-day SMA
“The U.S. is the only one that is ready to hike. The rest of the world is either neutral or dovish. That supports the positive dollar view.”
- Credit Suisse (based on Bloomberg)
Pair’s Outlook
Although the USD/JPY managed to climb above the 121.00 major level, the 200-day SMA limited the Greenback’s gains yesterday. According to short-term indicators, the Buck is poised for another surge, despite having retreated to the opening price (pushed back by the weekly R1) today. The 200-day SMA is still acting as a rather strong resistance, and along with a number of fundamentals, might cause a decline towards the 120.00 cluster. A fresh two-month high is yet to be established, with the next supply target around 121.75, namely the 100-day SMA.
Traders’ Sentiment
Bears keep taking up 71% of the market, while the portion of orders to acquire the USD gained seven percentage points to 56%.
Gold slumped to reach 4-month trend-line
“After breaking through trend line support around $1,119 overnight, the next downside target for gold currently sits around $1,105.”
- MKS Group (based on CNBC)
Pair’s Outlook
Bears spent the Tuesday's trading session by actively selling the yellow metal, just before the bunch of US statistics is published later on Wednesday. A perfect trade pushed XAU/USD down to the four-month major trend-line, where the daily closing level was touched at 1,117. Optimistic US fundamentals may result in breaching of this crucial support, which will then expose the Oct low at 1,104 and Sep low at 1,098. In case of a rebound, bulls should target the yesterday's open at 1,133 and keep in mind 100/55-day SMAs at 1,137/39.
Traders’ Sentiment
Sentiment with respect to US Dollar worsened in the past 24 hours of trading, while the share of long open positions on gold rose by three percentage points. At the moment both bulls and bears are keeping the equal number of current trades in the SWFX market.
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