Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD approaches support up-trend
“The euro came under pressure but the magnitude of its decline was nominal compared to other major currencies because of risk aversion and the fact that $1.10 is being defended aggressively.”
- Kathy Lien, BK Asset Management (based on CNBC)
Pair’s Outlook
EUR/USD retains potential to go lower from here. There are still 40-50 pips left until the probable turning point. The 1.0972/51 demand area consists of several notable levels, including the lower bound of the ascending channel, 100-day SMA, and monthly R1. In case it holds, the target for the next month will be the October 2015 high at 1.15. However, if the price keeps falling nonetheless, we are likely to see a test of the late January lows around 1.08 dollars.
Traders’ Sentiment
Although the percentage of bullish market participants increased, the sentiment remains neutral. At the moment, 52% of positions are long and 48% are short. The distribution between the buy and sell orders is similar, only 48% of commands are to buy and 52% to sell.
GBP/USD to keep sliding down
“[Brexit could] put at risk important external financing sources for the UK's sizable current account deficit. In a worst-case scenario, a Brexit could also harm the sterling's role as a global reserve currency, removing what has been a significant support for our 'AAA' rating since the start of the global financial crisis.”
- S&P (based on Reuters)
Pair’s Outlook
The British Pound experienced another sell-off yesterday, exceeding Monday’s loss by ten pips. Even though technical studies retain mixed signals in the daily timeframe, the Cable is expected to suffer another decline today, falling under the 1.40 mark. The closest area to limit the dips is represented by the weekly S3 and the monthly S1 at 1.3945. However, this threshold might well fail to keep the GBP/USD currency pair afloat, leaving the door open to a decline towards the 1.39 major level. Meanwhile, the Bollinger band and the weekly S1 form a resistance area around 1.4065.
Traders’ Sentiment
Although not as strong as yesterday, but market sentiment remains bullish at 67%. The share of purchase orders slid from 70 to 54%.
USD/JPY attempts to remain above the 112.00 mark
“The combination of comments from Kuroda and broader market moves are helping support the yen and that's why it's stronger.”
- Wells Fargo (based on Business Recorder)
Pair’s Outlook
Although neither technical level was breached yesterday, the USD/JPY currency pair closed trade with a 79-pip loss. The immediate support cluster, namely the monthly S3 and the weekly S1, was put the test, but succeeded in keeping the Buck above 112.00 yen. The pair was unable to pierce this support through all of the month, but technical indicators suggest the exchange rate could drop below it today. In this case the next target will be the weekly S2 at 110.67, unless positive US fundamentals trigger a rally; the nearest resistance, however, is to remain intact.
Traders’ Sentiment
Bullish traders’ sentiment remains unchanged at 74%, while the portion of sell orders dropped 8% points lower, down to 74%.
Gold is bullish
“Gold is performing largely as a safe-haven asset given the equity doldrums and overall risk aversion. Should risk aversion dominate amid intensified global growth headwinds, gold may well rally to as high as $1,400.”
- Barnabas Gan, Oversea-Chinese Banking Corp. (based on Bloomberg)
Pair’s Outlook
The precious metal is well-positioned to resume its January and early February rally. While there could be a small sell-off in the near term, as long as 1,211/10 (up-trend and monthly R3) is intact, our target will be the February high at 1,264. Alternatively, should the bears push the price under 1,211/10, as suggested by the monthly technical indicators, this will not automatically invalidate the overall positive outlook, since there is also a strong demand area circa 1,190 dollars, represented by the recently violated three-year-old falling trend-line.
Traders’ Sentiment
The bears in the SWFX market stand firm. They take up 71% of the market, which is slightly higher than their 10-day average share of 66%.
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 regains traction, recovers above 1.0700
EUR/USD regained its traction and turned positive on the day above 1.0700 in the American session. The US Dollar struggles to preserve its strength after the data from the US showed that the economy grew at a softer pace than expected in Q1.
GBP/USD returns to 1.2500 area in volatile session
GBP/USD reversed its direction and recovered to 1.2500 after falling to the 1.2450 area earlier in the day. Although markets remain risk-averse, the US Dollar struggles to find demand following the disappointing GDP data.
Gold climbs above $2,340 following earlier drop
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.