Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD closed Tuesday trading above 1.1260
“To break out of that trading range [1.05-1.15] in either direction we need a significant change in the story, either around the European Central Bank or the Fed.”
- Russel Investments (based on Bloomberg)
Pair’s Outlook
A long-awaited close above the 50% Fibonacci retracement of the Jul-Aug uptrend became reality yesterday. While being underpinned by the 55-day SMA, currently at 1.1169, EUR/USD pierced through several crucial resistances to reach the 1.1270 mark by the end of Tuesday's trading session. However, a recovery remains sluggish, meaning that we should observe Wednesday's consolidation above 1.1260, in order to completely refocus our attention to the upside. In case of success the long traders will target both upper Bollinger band and 38.2% retracement at 1.1364/68.
Traders’ Sentiment
The share of bulls fell from 50% to 49% in the past 24 hours, while long pending orders in 100-pip range from the spot price improved from 50% to 52%.
GBP/USD takes another crack at weekly R1
“People are still very skeptical about the Fed raising rates this year.”
- Macquarie Ltd (based on Reuters)
Pair’s Outlook
The US currency failed to outperform the Sterling, amid poor trade data and rising concerns over a 2015 Fed rate hike. As a result, the Cable tested the weekly R1 for the second time, breaching the immediate resistance and settling above the major level of 1.52. The bullish momentum is expected to dominate today as well, but with the upside volatility limited by a strong cluster around 1.53 psychological level. However, weak UK fundamentals could push the GBP/USD back under 1.52, as technical studies retain bearish signs.
Traders’ Sentiment
Bullish SWFX traders’ sentiment returned to its Monday’s level of 64%. Meanwhile, buy orders take up the majority (59%) of the market again, compared to 48% yesterday.
USD/JPY stuck between 120.00 and 120.80
“Even if Mr Kuroda refrains from hinting at more easing, it helps to recall that he has been willing to spring a surprise in the past. We stick to our view that the Bank [of Japan] will announce more easing at its end-October meeting.”
- Capital Economics (based on WBP Online)
Pair’s Outlook
The US Dollar began weakening against the Yen, after having reached the 120.63 potential resistance yesterday. Losses, in turn, were limited by the 20-day SMA, which prevented the USD/JPY from dropping to the 120.00 major level. Nevertheless, the Greenback risks breaching this area today and even pierce the support cluster around 119.80, while the any attempts to rebound are likely to be held by the same 120.63 mark, which is keeping the US currency from edging higher for almost six weeks now.
Traders’ Sentiment
Bulls account for almost three quarters (73%) of the market (previously 70%). The number of orders to purchase the Buck also increased, from 58 to 64%.
Gold reaches bearish pattern's upper boundary again
“We have to suspect that as U.S. macro data starts to deteriorate, the dollar will likely continue to weaken from here, providing further upside to impetus for gold.”
- INTL FCStone (based on CNBC)
Pair’s Outlook
As expected the precious metal surged above the 100-day SMA and 61.8% Fibonacci retracement of the Aug-Sep downtrend on Tuesday. It was actively supported by the 50% retracement and was therefore able to register substantial positive change in value. While bulls are set to aim at the monthly R1 (1,147) next, the cross has again touched the upper boundary of the channel down pattern. Thus, bearish pressure is likely to increase in the short term, while daily technical indicators changed from bullish to neutral in the past 24 hours. However, a close above 1,156 (Sep 24 high) would reopen the 1,170 mark for bulls.
Traders’ Sentiment
After gains at the end of the previous trading week, the number of SWFX long open positions has recently resumed declining. However, during the past 24 hours their share has been fairly stable at 52%.
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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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