GBP/USD stuck between 1.52 and 1.54

Technical Analysis

EUR/USD settles above weekly S1

“The euro’s finding a little support on some headlines that a potential draft is in the pipeline. This would be a first step toward an official deal. It’s somewhat still in its early days.”

- Standard Chartered Plc (based on Bloomberg)

• Pair’s Outlook

  Yesterday, the common currency stopped losing value and settled just above the weekly S1 at 1.0856. This level continues to support EUR/USD on Thursday as well. However, this development seems to be temporary, and there is a risk of even steeper drop in the medium-term. In case the pair consolidates below 1.0850, it is likely to be pushed as low as 1.0740 (monthly S1) in a short period of time. Meanwhile, daily and weekly technical indicators are mixed on the perspectives of this currency pair at the moment.

• Traders’ Sentiment

  The gap between long and short positions remains insignificant at the moment, as bulls are keeping 48% of all opened positions, down one percentage point during the past 24 hours.

GBP/USD stuck between 1.52 and 1.54

“Macro funds betting on a September Fed rate hike have increased their long exposure to the dollar, which was the main driving force behind the rise this week.”

- Nomura Securities (based on CNBC)

• Pair’s Outlook

  The Cable keeps falling for the second week in a row, as the Sterling declined again versus the Greenback yesterday. The pair attempted to edge higher, but the 200-day SMA pushed it all the way down to 1.53 psychological level. However, the weekly S1 managed to provide some support, as the Pound settled at 1.5350. A rebound is likely to take place today, with the Cable closing trade around 1.5450. Nevertheless, we should not rule out the possibility of a slump down to 1.52 if the fundamental data disappoints, while technical studies retain mixed signals.

• Traders’ Sentiment

  Bulls returned to last Friday’s level of 45%, whereas the number of buy orders increased from 53 to 56%.

USD/JPY reaches 13-year high

“I thought the market would see a correction given the straight days of gains, but contrary to my initial view, it's being lifted by the weak yen.”

- Sumitomo Mitsui Trust Bank (based on Reuters)

• Pair’s Outlook

  The Greenback keeps appreciating against the Yen for the second week in a row. The nearest resistance cluster was easily breached, but the USD/JPY currency pair struggled to stay above the 124 area. Technical indicators retain their bullish signs, suggesting further rally today. The nearest resistance is the 124.14 level, although we might see a surge up to 124.58 if the fundamentals do not disappoint. Meanwhile, the Bollinger band is providing support and is not allowing the Buck to climb down.

• Traders’ Sentiment

  For the fourth consecutive day bullish market sentiment lost one more percentage point, down to 55%. The share of commands to purchase to the Buck surged from 62 to 80%.

XAU/USD unchanged at two-week lows

“Gold and silver flounder against a backdrop of no major data releases to give price guidance and sluggish physical demand.”

- HSBC (based on CNBC)

• Pair’s Outlook

  It seems that market decided to limit the bullion's movements on Wednesday, following a sharp decline a day before. The XAU/USD cross made no single attempt to plummet below the weekly S2 at 1,182 or grow back above the resistance area at 1,194. The metal is likely to wait for additional drivers at the end of the week and will stay broadly unchanged on Thursday. Nevertheless, any close beyond the mentioned supply or demand zones may provoke substantial gains or losses, respectively. The short-term technical studies are bullish, with four of them giving signals to buy the precious metal.

• Traders’ Sentiment

  Advantage of bulls over bears at the SWFX market change just a little from yesterday, and the gap between them widened by two additional percentage points during the past 24 hours. The total share of longs currently stays at 62% versus 38% for shorts.