Technical Analysis
EUR/USD to end the week in tranquil trading
“He [Mario Draghi] is going to pull a rabbit out of the hat -- we’re just not sure what that rabbit will be. The euro is going down heavily.”
- BMO Global Asset Management (based on Bloomberg)
Pair’s Outlook
EUR/USD continued to trade in a tight range on Thursday, owing to lack of major fundamental and technical drivers throughout the day. Closest support, namely the weekly S1 at 1.0586, is not considered as a very strong one. However, it may succeed in containing losses on Friday amid quiet end of the working week. Yesterday the total trading volume halved and reached the lowest level since May-end, which justifies current low turbulence in the FX market.
Traders’ Sentiment
Bank Holiday in the US resulted in no change for distribution between bullish and bearish positions, which holds at 51-49%. As for the pending orders, 47% of commands are set to buy the Euro in 100-pip range, down one percentage point from yesterday.
GBP/USD gravitates towards weekly S1
“With commodity prices coming under renewed downward pressure, the Bank of England may well find it difficult to hike rates in 2016. Put simply it looks to us as if 2016 will be the year that sterling finally loses its shine.”
- Bank of New York Mellon (based on Business Recorder)
Pair’s Outlook
The Sterling made its way closer to the Nov low yesterday, by falling towards the major level of 1.51 against the US Dollar. The Cable appears to be glued to the weekly S1 level and refuses to drop below 1.5075 this week, suggesting that the exchange rate could edge approximately 25 pips higher today. Although technical studies are bolstering this outcome with their bullish signals, the downslide might be extended with the weekly S2 and the Nov low acting as the nearest support around 1.5035.
Traders’ Sentiment
The outlook towards the GBP/USD improved again today, with 54% of all positions being long (previously 53%). The share of sell orders barely changed over the day, taking up 57% of the market.
USD/JPY stuck around 122.50
“We also expect JPY selling by domestic investors/businesses to continue. We do not expect Japanese policymakers to react very negatively if JPY weakens to the 130 level […].”
- Nomura Bank (based on FXStreet)
Pair’s Outlook
On Thursday the US Dollar edged lower against the Japanese Yen, somewhat breaching the up-trend. As a result, price opened further away from the up-trend and risks falling even deeper down, as the 20-day SMA at 122.57 is currently weighing on the pair. The nearest target to limit the dips is around 122.05, represented by the weekly S1 and monthly R1, but technical indicators keep giving bullish signals. The nearest resistance in face of the weekly PP remained unconquered through all of the week and is expected to prevent the USD/JPY from recovering.
Traders’ Sentiment
Bears remain in the majority, as 73% of traders are short the Buck. Meanwhile, the portion of buy orders increased from 56 to 63%.
Gold sees no value change during Thanksgiving
“Once again, gold is unable to find a bid. Any small rally that we see is being sold into.”
- Sydney-based precious metals trader (based on CNBC)
Pair’s Outlook
The bullion was literally unchanged in price on Thursday, which is explained by US Bank Holiday and low volatility in both commodity and FX markets. Price opened and closed just above July low at 1,070. On Friday morning we see some downward activity taking place, but we expect the overall daily trading range to stay quite narrow. In any case, gold is required to trade below July low for two consecutive days, in order to confirm this support. Trading volume crashed 2.5 times since last week's peak and will support light trading in the near term.
Traders’ Sentiment
Market sentiment with respect to gold remains strongly positive for the moment. More than 72% of SWFX traders are holding long positions, no change in the past 24 hours. However, risks are skewed to the downside as gold seems to be overbought.
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.
Recommended Content
Editors’ Picks
AUD/USD holds above 0.6500 in thin trading
The Australian Dollar managed to recover ground against its American rival after AUD/USD fell to 0.6484. The upbeat tone of Wall Street underpinned the Aussie despite broad US Dollar strength and tepid Australian data.
EUR/USD comfortable below 1.0800 lower lows at sight
The EUR/USD pair lost ground on Thursday and settled near a fresh March low of 1.0774. Strong US data and hawkish Fed speakers comments lead the way ahead of the release of the US PCE Price Index on Friday.
Gold price finishes Thursday’s session set to reach new all-time highs
Gold price rallied during the North American session on Thursday and hit a new all-time high of $2,225 in the mid-North American session. Precious metal prices are trending higher even though US Treasury yields are advancing, underpinning the Greenback.
Bitcoin price extends retreat from $69K as old whales shift their holdings to new whales
Bitcoin price continues to move further away from the $69,000 threshold, gaining ground as BTC bulls hope for a retest of the $73,777 peak. This is because of the general assumption that clearing this blockade would set the tone for a reach higher, marking a new all-time high.
Bears have been standing before a steamroller so far this year
Despite a pushback on rate cuts from Christopher Waller, and what was supposed to be cautious trading sentiment ahead of critical US inflation data released later on Friday, the S&P 500 rose on Thursday, marking its best first-quarter performance in five years.