EUR/USD slumps below 1.075 after NFP

Technical Analysis

EUR/USD slumps below 1.075 after NFP

“We do have to lower our target for the euro, perhaps $1.04 and $1.05 on the assumption that the Fed does deliver that rate hike in December and that the ECB delivers expanded quantitative easing.”

- Westpac Banking Corp. (based on Bloomberg)

• Pair’s Outlook

  Daily decline of the Euro against the US Dollar amounted to 150 pips on Friday, following encouraging employment report from the world's biggest economy. May and July lows failed to contain losses and EUR/USD ended the week at 1.0736. Considering lack of fundamental drivers in the next few days, we will expect some rebound to take place in the near term. At the same time, monthly S1 at 1.0768 will be the first to try limiting any possible rally. Meantime, bears are now setting eyes on monthly S2/Apr low at 1.0533/19.

• Traders’ Sentiment

  Bulls are holding the majority of open positions in the SWFX market, namely 52% of them, while commands to buy the Euro

GBP/USD makes efforts to recover from Friday’s slump

“The UK and US economies have clearly been in a far more advanced cyclical position relative to the euro area and Japan for a long time now. And we still believe the UK to be the front-runner of them all, just not in terms of the monetary policy setting.”

- Nomura (based on FXStreet)

• Pair’s Outlook

  The Sterling suffered heavy losses against the US Dollar on Friday, amid an extremely better-than-expected Non-Farm Payrolls data. As a result, not only the seven-month support was pierced, but also the Sep low of 1.5106. Technical studies remain bearish today, but due to lack of impetus the Cable might remain unchanged over the day; however, after falling more than 300 pips last week a correction is more likely to take place. Immediate resistance is represented by the Bollinger band at 1.51, while the nearest support leaves enough room for a decline towards 1.4950.

• Traders’ Sentiment

  Bears took the upper hand, accounting for 54% of the market, whereas the share of sell orders increased from 47 to 51%.

USD/JPY settles down at new 11-week high

“More than any other major currency, we think the expectations of Fed rate hikes are most fully priced into USD/JPY.”

- TD Securities (based on WBP Online)

• Pair’s Outlook

  The USD/JPY exceeded all expectations and climbed above the 123.00 major level on Friday and even higher over the weekend. On Monday the Greenback is likely to remain flat, as the Bollinger band is supporting the pair from below, while the monthly R2 is preventing the Buck from edging higher. Technical studies, on the other hand, are still giving bullish signals, implying that the US Dollar might prolong its rally for at least another day. The lack of market movers, however, suggests otherwise, with a small correction due.

• Traders’ Sentiment

  Bears still remain strong, as 71% of all traders are holding short positions, compared to 73% on Friday. The portion of buy orders dropped again, losing 14% points to 41%.

Gold touches 1,090 after US labour market data

“Further downwards pressure is expected on the precious complex in the lead up to the December FOMC meeting.”

- MKS Group (based on CNBC)

• Pair’s Outlook

  There was no chance given to the bullion to commence any kind of recovery on Friday, owing to strongly optimistic jobs report for October. XAU/USD slid below the major 1,100 mark, which was guarded by the monthly S1. Our medium term expectation is refocusing on the Jul low around 1,070 and supports appreciating US currency. At the same time, short term development is highly likely to be little turbulent amid lack of fundamental drivers on Monday and Tuesday. This scenario is shared by mixed daily and weekly technical indicators.

• Traders’ Sentiment

  Many traders decided to close their short trades and provided more space for bulls in the SWFX market. Thus, the portion of the latter grew from 55% to 57% over the weekend, the highest percentage in seven weeks.

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