EUR/USD hovers below 23.6% Fibo

Technical Analysis

EUR/USD hovers below 23.6% Fibo

“Since the ECB started buying bonds, we’ve seen some signs of opportunistic behavior on the part of governments, so generally we’ve seen more supply than expected.”

- Rabobank (based on Bloomberg)

• Pair’s Outlook
  On a short-term chart, EUR/USD is trading in a rather wide range between two major technical levels at 1.1257 (23.6% Fibo) and 1.11 (weekly PP). Strengthened by 100-day SMA and Bollinger band from above, the Fibonacci retracement is likely to energize bears for pushing the single currency downwards. At the same time, the weekly PP is defending itself alone, meaning that a close below this line will open the opportunity to slump as low as 1.10 (monthly PP) in the near-term.
• Traders’ Sentiment
  Distribution between long and short positions at the SWFX market remains biased in favour of the latter, as bulls are currently in the minority with only 46% of all opened positions.

GBP/USD sets eyes on 1.50

“We expect sterling to remain under pressure at least until the political fog lifts.”

- ANZ (based on CNBC)

• Pair’s Outlook

  The Sterling failed to meet expectations, as it suffered heavy losses on Friday, amid weak fundamentals. The initial support at 1.53 was pierced, and the Cable even fell deeper down under 1.52. Ultimately, the Cable stabilised at 1.5134, just under monthly PP. Further weakness of the Pound is anticipated today. Several support levels lie on the way, but a slump beyond 1.50 psychological level is unlikely, as it is bolstered by the weekly S1. Meanwhile, technical studies are suggesting a surge, as they are distinctly bullish today.

• Traders’ Sentiment

  Market sentiment remained unchanged, with the share of longs still accounting for 40% of the market. The number of buy orders is now the in the majority, as 51% of them are to acquire the Pound.

USD/JPY extends rally

“There is a widening perception in the market that the strong dollar is becoming a tangible drag on U.S. exports, and this was reinforced by the recent Q1 2015 GDP release. However, the longer-term perspective remains that the U.S. is on track to deliver a rate hike, most likely in September.”

- BNP Paribas (based on Reuters)

• Pair’s Outlook

  Last Friday, the US Dollar overperformed, as it advanced against the Japanese Yen, easily breaching nearest resistances. Furthermore, the Greenback even managed to overcome the 120 psychological level, afterwards settling at 120.18. Today the USD/JPY currency pair is expected to rise again, with immediate resistance located at 120.42, namely the Bollinger band; however, a stronger cluster rests around 120.75. Meanwhile, technical studies remain mixed in the shorter timeframe, while the longer ones retain bullish signs.

• Traders’ Sentiment

  Market sentiment worsened again, as only 66% of traders are now long the Buck (previously 72%). At the same time, the number of buy commands declined from 65 to 59%.

XAU/USD trades around 2013 low

“Gold has proven one time too many that it prefers to stick to $1,200 amid large fluctuations and I am inclined to believe that the precious metal may slowly edge back to that level just before Friday's nonfarm payrolls.”

- Phillip Futures (based on CNBC)

• Pair’s Outlook

  Despite an attempt to test the 1,170 area, XAU/USD decided to return back towards the 2013 low by the end of the session. In addition, some bullish support was provided by the lower Bollinger band, currently at 1,174. If the bullion wants to confirm the medium-term bearish outlook, it should consolidate even below the weekly PP at 1,160. Otherwise, the precious metal will try to remain within a tight range below 1,194, where the price is going to be strongly limited by 55-day SMA and monthly PP.

• Traders’ Sentiment

  Advantage of bulls over bears at the SWFX market is considerable at the moment, as the former are dominating by keeping 73% of all opened positions, down two percentage points over the weekend.