GBP/USD on the edge of falling to 2015 low

Technical Analysis

EUR/USD to retest resistance cluster at 1.08

“They put a lot of caveats in their liftoff. It's a theme that may haunt the dollar.”

- FXCM (based on Reuters)

• Pair’s Outlook

  After FOMC meeting minutes said that a rate hike decision was "a close call", market participants decided to sell the Dollar on Wednesday. Gains are being prolonged on Thursday at the moment of writing, with EUR/USD attempting to attack the busiest resistance zone at 1.08. However, another obstacle is represented by 55-day SMA at 1.0836, followed by 20-day SMA at 1.0861. Within the bearish pattern, the pair is capable of growing as high as weekly R1 near 1.0950, while the medium-term forecast still remains bearish, as suggested by technical indicators on all time frames.

• Traders’ Sentiment

  The percentage bullish SWFX trades dipped from 43% to 41% by Thursday morning, while both 50 and 100-pip pending orders are still set to sell the Euro in more than 60% of all cases.

GBP/USD on the edge of falling to 2015 low

“More and more, we see a certain level of discomfort among the Fed regarding the strength of the dollar.”

- Toronto-Dominion Bank (based on Bloomberg)

• Pair’s Outlook

  A much stronger-than-anticipated ADP data on Tuesday contributed to the Cable’s weakness that day, pushing the pair to retest the 1.46 level. Nonetheless, another decline is likely to be short-lived, as the GBP/USD is now supported by a strong cluster around the 2015 low of 1.4565, represented by the weekly S2; monthly 2 and the Bollinger band. Due to the lack of sufficient downward momentum a breach is not yet expected; however, although a rebound is possible, the weekly S1 at 1.4668 is to provide resistance and prevent the Sterling from climbing too high.

• Traders’ Sentiment

  Today 64% of traders hold long positions (compared to 62% yesterday), while the share of buy orders inched up from 57 to 58%.

USD/JPY on the brink of plunging to 4.5-month low

“After JPY short positions are unwound, USD/JPY depreciation should slow. In addition, mid-term flows remain large net JPY selling in 2016, in our view. From a supply-demand perspective, we see only limited downside risks for USD/JPY from the current level.”

- Nomura (based on FXStreet)

• Pair’s Outlook

  Even a positive reading of the employment data Tuesday was insufficient to help the USD/JPY recover. However, the because of that data the pair failed to drop as low as Oct 2015 low, but another devaluation of the Yuan today triggered a buying spree of safe haven currencies, such as the Yen, pushing the Greenback down to 117.63. The Oct 2015 low might still be sufficient to limit intraday losses, but the key support is the monthly S2 at 117.63, a breach of which is to set the USD/JPY on the path to a one-year low of 115.85.

• Traders’ Sentiment

  The gap between bulls and bears keeps narrowing, as 44% of traders are now long the Buck, while the remaining 56% are short. At the same time, the portion of buy orders edged down 6% points to 53%.

Gold skyrockets to probe 1,100

“Gold continued to climb with rising safe-haven demand amid the rebound in market volatility. Rising equities losses and surprising devaluation of the yuan are painting a positive picture for gold.”

- ANZ (based on CNBC)

• Pair’s Outlook

  A rally for the bullion is taking place for a fourth consecutive day on Thursday. Yesterday we saw the sharpest climb in a month, after prices went through two vital resistance areas near 1,085 and 1,091. The first obstacle was more important, as it was reinforced by 55-day SMA, weekly R2 and monthly R1. Now the main focus is turning to the psychological level of $1,100 per ounce. It is guarded by the monthly R2 and 100-day SMA around 1,108, followed by the monthly R3 at 1,127. Nonetheless, the daily RSI indicator is already assuming the precious metal is somewhat overbought at the moment.

• Traders’ Sentiment

  Only six percentage points are now dividing the bulls from bears in the SWFX market. The former are holding only 53% of all open positions, down from 54% we had observed 24 hours ago.

•  Download Full Daily Forex Technical Overview

  Don't miss our new daily forecasts for EUR USD, GBP USD, USD CAD and USD JPY!