Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD prepares for Super Week below 1.06
“The euro will likely see its trough in January-March but chances will grow for its rebound as expectations for U.S. rate hikes will be more moderate next year.”
- Mizuho Bank Ltd. (based on Bloomberg)
Pair’s Outlook
EUR/USD is getting ready for sharp losses by the end of new trading week, in case the ECB announces more stimulus on Thursday. By now all movements remain muted and follow a little volatile development of the previous week. Bears are setting eye on 1.0519 (April low) in the near term, which is reinforced by weekly S1, monthly S2 and lower Bollinger band. However, we expect the cross to pierce through 1.05 by the second half of the week. However, daily and weekly indicators preserve mixed views on the matter.
Traders’ Sentiment
On Monday the Euro (52%) is preferred slightly more than its US counterpart (48%). On top of that, neither bulls nor bears are controlling the majority of pending orders.
GBP/USD hovers over November low
“UK growth has been on a gently slowing path over the past 18 months, despite interest rates remaining at exceptionally low levels.”
- Andy Haldane, BoE chief economist (based on WBP Online)
Pair’s Outlook
In spite of all positive signs, the Sterling suffered a rather heavy loss against the US Dollar on Friday, amid rising conviction of the Fed hiking in December. The Nov low at 1.5026 was able to limit the losses and should cause the Cable to undergo a correction and rebound today. The immediate resistance to prevent any substantial gains is located only at 1.5084, but is unlikely to be reached. At the same time, risks of the GBP/USD edging even lower persist, with the weekly S1 and the Bollinger band providing support around 1.4970.
Traders’ Sentiment
Market sentiment keeps improving, with 57% of all traders holding long positions today. The gap between the buy and the sell orders narrowed. Orders take up 47% and 53% of the market, respectively.
USD/JPY sets eye on the up-trend
“Market expectations for BOJ easing by year-end have already almost disappeared, and the impact of a likely decision of no policy change in December on USD/JPY would be limited.”
- Nomura (based on FXStreet)
Pair’s Outlook
The US currency managed to outperform the Japanese Yen at the end of last week, after edging closer to the weekly low of 122.25. However, the immediate resistance pushed the USD/JPY back, resulting only in a 15-pip gains. Although the Greenback was unable to retake the up-trend, it still refuses to leave the line behind. The weekly PP and the 20-day SMA are holding the pair afloat around 122.70, while the immediate resistance, now represented by the weekly R1 at 123.22, could allow the Buck to return above the 123.00. Technical studies are supporting the bullish outcome.
Traders’ Sentiment
There are still 74% of traders being short the US Dollar, while the portion of orders to acquire the Buck edged higher from 63 to 68%.
Gold rout is strengthened by uplifted Dollar
“Greenback strength is clearly not friendly to gold prices.”
- IG Asia Pte (based on Bloomberg)
Pair’s Outlook
With US markets reopening for shorter-than-usual session on Friday, the traders' focus was shifted back to the Fed December meeting and a busy new week. The bullion was sent down to 1,055 by Friday evening and it eventually confirmed the July low placed at 1,070. Now we are estimating additional losses for the yellow metal. The key support is located at 1,044 (2010 low), which will be the main bearish target before Friday US jobs data. Stronger losses should expose the next major demand at 1,031 (2008 high).
Traders’ Sentiment
Market sentiment with respect to gold remains strongly positive for the moment. More than 73% of SWFX traders are holding long positions, up one percentage point over the weekend. However, risks are skewed to the downside as gold seems to be overbought from the point of view of SWFX market participants.
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
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.