Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD: bears are contained by 1.08
“It (the ECB) will pursue an accommodative monetary policy for as long as is necessary. Without giving a date, this timescale is fairly long.”
- Peter Praet, ECB Executive Board member (based on Bloomberg)
Pair’s Outlook
The closest support represented by this year's July low at 1.0808 managed to cap a sell-off for the second consecutive day on Friday. It provided the bulls with some fresh upward momentum that pushed EUR/USD in the direction of the 38.2% Fibonacci retracement of an Oct-Nov downtrend at 1.0893. This level is guarding the monthly R1 and weekly PP around 1.09. A success here will require an additional surge above 55-day SMA (1.0939) to expose both 200/100-day SMAs around 1.1050. Meantime, daily indicators are now strongly bullish on EUR/USD.
Traders’ Sentiment
The bulls are still holding 46% of all trades, which puts the bears at 54% today. Meantime, bullish pending orders changed within the margin of error, by growing from 27% to 32% in 100-pip range.
GBP/USD retests down-trend
“After the FOMC... a lot of investors have just sort of closed shop for the year or dialed down their trading activity.”
- BAML (based on Business Recorder)
Pair’s Outlook
Even though the Cable failed to rebound on Friday, losses were still limited by the pattern’s support line. The pair opened above the 1.49 major level again and should experienced a correction after experiencing a whole week of losses. The immediate resistance is now represented by the weekly PP at 1.4998, but Friday’s situation could also repeat itself, causing the GBP/USD to drop to 1.4889, namely the down-trend. The pattern’s lower border is bolstered by the Bollinger band and monthly S1, which are to contribute to the pattern’s preservation.
Traders’ Sentiment
Traders’ sentiment remains bullish at 64% (previously 65%), whereas sell orders are outnumber the buy ones by only 2% points.
USD/JPY under the risk of falling below 121.00
“But it seems the market has been confused and gained perspective that the BOJ announcement revealed the limitations of what it can do. Due to concerns and confusion about the BOJ policy, the dollar will likely remain top heavy at this moment.”
- Barclays (based on Market Watch)
Pair’s Outlook
The tough cluster around 121.60 was unsuccessful at holding the losses last Friday, resulting in a slump to 121.14. Today the mentioned cluster is providing resistance, but gains could extend above that group of levels, as it failed to limiting volatility previously. According to technical studies, the US Dollar to decline again today; however, the monthly S1 was able to keep the USD/JPY afloat in December and is likely to do so again today, as it is reinforced by the Bollinger band. Meanwhile, the 55-day SMA crossed the longer period ones, providing a signal to buy the Buck.
Traders’ Sentiment
Slightly less than three quarters (74%) of all positions remain short, while 58% of all orders are to acquire the Greenback (up from 34%).
Gold is flirting with July low again
“We believe that trading conditions will start to thin out, but that does not mean trading ranges will necessarily narrow.”
- INTL FCStone (based on CNBC)
Pair’s Outlook
Despite booking a weekly loss, the bullion managed to regain most of a Thursday's sell-off and grew back in the direction of 1,070. There gold is supposed to meet the July low and 20-day SMA, which will try to put formidable negative pressure on prices. In case they both are breached, the focus will then turn to the first weekly resistance at 1,080, followed by the monthly pivot point and upper Bollinger band at 1,086. At the same time, daily technical studies are mixed and estimate the trading to be broadly sideways throughout the next 24 hours.
Traders’ Sentiment
Some of the SWFX traders decided to take profit from a climb that gold prices have seen back last Friday. As a result of that, the percentage of long market participants was slashed from 60% to 57%, the lowest level in almost six trading weeks.
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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