Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD steady before US payrolls report
“The market is on tenterhooks ahead of the U.S.. non-farm payrolls.”
- IG Markets Ltd. (based on Bloomberg)
Pair’s Outlook
Thursday trading was tranquil in terms of volatility, while EUR/USD decided to wait for more pronounced fundamental impetus on Friday. At the moment it is hovering slightly below the weekly S1 at 1.09, thus supporting our medium term bearish outlook. Short traders remain focused on the 1.08 mark, where May and July lows are reinforced by the weekly S2. This area is highly likely to be tested on Friday in case of positive US jobs report. On the other hand, a disappointment from fundamental front may send EUR/USD higher, and bulls are determined to regain 1.10 (weekly PP).
Traders’ Sentiment
Bulls are holding 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 dropped back to 45% (53% yesterday).
GBP/USD on the edge of breaching long-term support
“Fed policymakers appear to be trying to keep the possibility of a December rate hike alive since their last policy meeting.”
- Barclays (based on CNBC)
Pair’s Outlook
The Cable lost over 170 pips on Thursday, suffering from BoE governor’s dovish statement. As a result, the strong immediate support was pierced, causing the GPB/USD to stabilise near the seven-month up-trend. Although the 23.60% Fibo, the Bollinger band and the weekly S1 are bolstering the support line, the broadly stronger US Dollar might cause another decline towards the Sep low of 1.5106. A perfect scenario is a rebound from the up-trend, therefore, preserving the current triangle pattern. Technical studies, however, are now giving bearish signals in the daily timeframe.
Traders’ Sentiment
Market sentiment remains bullish, now at 53% (previously 51%), while the portion of buy orders lost 10% points, falling to 53%.
USD/JPY attempts to break through Aug 28 high
“The dollar has so far climbed on the back of rising U.S. bond yields, but that will not be enough to sustain a further rise. If stocks can retain their gains, the dollar can go even higher as the 'risk on' mood will work to its benefit. The stock markets will have to show that it has priced in a December rate hike.”
- IG Securities (based on Reuters)
Pair’s Outlook
The Greenback retreated from its intraday high after the US data disappointed yesterday, thus confirming the resistance line at 121.74. This resistance is now under higher pressure, as the US fundamentals are expected to be in favour of the US currency. As a result, the Buck is likely to retake the 122.00 major level and possibly even pierce the resistance cluster around 122.10. However, risks of falling below the Monday’s opening price persist, as weekly technical indicators are giving bearish signals and the immediate resistance might cause the USD/JPY to bounce back on weak data.
Traders’ Sentiment
Slightly less than three quarters (73%) of traders are now short the USD. The share of buy orders barely changed: slid from 56 to 55%.
Gold prepares for US jobs data, stays at 1,105
“Gold continues to trend lower with rising bets on a Fed rate hike in December. The recent trend looks entrenched with sentiment weakening in recent days.”
- ANZ (based on CNBC)
Pair’s Outlook
Gold's losing streak was prolonged through the seventh consecutive day on Thursday, already pricing in the approaching employment report from the world's largest economy. Key target for bears remains the 1,100 mark, which is strengthened by the monthly S1. Another long term support is offered by the Jul low at 1,070, but even stronger than expected US numbers are unlikely to push the bullion there immediately. Meanwhile, any disappointment may result in a spike up to the recently breached trend-line at 1,118 and additional gains are also possible up to 1,126 (weekly S1).
Traders’ Sentiment
As the metal continues to lose value, even more SWFX traders are fixing profit by closing short open positions. Yesterday the share of bulls added one additional percentage point to 55%, while bears are down even deeper to 45%.
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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