Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD breaches Dec-Jan downtrend, exposes 1.10 area
“With respect to the risks to the inflation outlook, the most concerning is the possibility that inflation expectations become unanchored to the downside.”
- William Dudley, New York Fed President (based on Reuters)
Pair’s Outlook
On Friday the most popular FX currency pair violated the two-month trend-line near 1.09, while daily gains attempted to push the pair as high at 1.10 (100-day SMA; Bollinger band). However, bearish market participants overtook the lead by the end of US trading and closed the week at 1.0915. Some weakness is possible on Monday, as Bank Holiday in the US is likely to reduce daily trading volume. After breaching the trend-line, the bulls will try to test the aforementioned 1.10 mark this week, even though this scenario is not particularly encouraged by negative weekly technical indicators.
Traders’ Sentiment
The share of SWFX long traders decreased to 44% by Monday morning. Meanwhile, commands to sell the Euro against the Buck in 100-pip range from the spot account for 55% today.
GBP/USD attempts to retake 1.43
“In the current environment however, with investors becoming increasingly worried about the impact of the slowdown in China, concerns over the UK economy and the risk of a 'Brexit' look likely to continue to haunt sterling.”
- HiFX (based on Business Recorder)
Pair’s Outlook
On Friday the Cable suffered a 150-pip loss, breaching the immediate support and closing in on the 2010 low. The Pound is now supported by the Bollinger band, which is the final obstacle, preventing the GBP/USD from falling to the lowest in six years. At the same time, the weekly PP and the monthly S2 now form a resistance cluster circa 1.4380, but a test today is unlikely. Nevertheless, the Sterling is expected to undergo a correction and recover some losses against the Buck, despite technical indicators retaining mixed signals.
Traders’ Sentiment
Bullish market sentiment remains unchanged at 63%, whereas the percentage of sell orders grew from 57 to 65%.
USD/JPY rises after Kuroda’s statement
“The BOJ will continue to monitor both upside and downside risks to economic and inflation conditions, and make adjustments as appropriate.”
- Haruhiko Kuroda, BoJ Governor (based on WBP Online)
Pair’s Outlook
The US Dollar ended the previous week lower against the Japanese Yen, as it breached the up-trend and dropped to the lowest in five months. However, in spite of the US Bank holiday today, the USD/JPY is likely to edge higher, as the PBoC’s policy movement and the BoJ Governor’s remarks drove demand for the safe-haven Yen lower. The weekly pivot point and the monthly S2 around 117.50 are the levels to stop the pair’s further appreciation; meanwhile, the weekly S1 and the Bollinger band should limit the dips in case a sell-off takes over the market.
Traders’ Sentiment
More traders, 68%, have a negative outlook towards the Buck (previously 62%), while 51% of all orders are to sell the Greenback.
Gold ends volatile trading week below 1,090
“It will be increasingly difficult for another hike in March, considering that China will continue to be weak.”
- Phillip Futures (based on CNBC)
Pair’s Outlook
Gold prices have swung between gains and losses since Tuesday, and on Friday they climbed from the 55-day SMA (1,077) to grow up to 1,088 by the end of US session. During the Asian trading on Monday the bulls are hoping to push it higher into the 1,095 area and, possibly, up to the current January high at 1,113 in the medium-term. Bank Holiday is the US should curb volatility on Monday, while many bullish catalysts in face of global market instability can be absent today. Still, supported by positive daily technical indicators the metal is capable of retaking 1,095 in the next 24 hours.
Traders’ Sentiment
In the morning on January 18 around 55% of all SWFX traders are betting on the bullion's increase in price in the nearest future, down from 56% before the weekend.
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 holds above 1.0700 ahead of key US data
EUR/USD trades in a tight range above 1.0700 in the early European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays above 156.00 after BoJ Governor Ueda's comments
USD/JPY holds above 156.00 after surging above this level with the initial reaction to the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold price oscillates in a range as the focus remains glued to the US PCE Price Index
Gold price struggles to attract any meaningful buyers amid the emergence of fresh USD buying. Bets that the Fed will keep rates higher for longer amid sticky inflation help revive the USD demand.
Sei Price Prediction: SEI is in the zone of interest after a 10% leap
Sei price has been in recovery mode for almost ten days now, following a fall of almost 65% beginning in mid-March. While the SEI bulls continue to show strength, the uptrend could prove premature as massive bearish sentiment hovers above the altcoin’s price.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.