GBP/USD poised for more weakness

Technical Analysis

EUR/USD enclosed between 1.1050 and 1.0950

“The EU referendum is skewing the euro picture toward caution and prudence.”

- Roberto Mialich, UniCredit SpA (based on Bloomberg)

• Pair’s Outlook

  The pair stalled after it had broken through the 200-day moving average. From above the fluctuations are now limited by 1.1050, while any attempts of the bears to push the price lower are to be prevented by a dense demand area at 1.0970/50, which consists of the up-trend, monthly R1, and 100-day SMA. Eventually, however, the bulls should gather enough strength to throw the rate above 1.1050, which will pave the way for a multi-week recovery towards the October high.

• Traders’ Sentiment

  There have been no changes in the SWFX sentiment since yesterday: 52% of positions are long and 48% are short. The share of sell orders increased from 52 to 54%.

GBP/USD poised for more weakness

“Unsurprisingly, the concerns for the global economy have continued to have disastrous consequences for the pound, which often performs poorly in a risk-off environment.”

- Currencies Direct (based on Business Recorder)

• Pair’s Outlook

  On Wednesday the Cable suffered a rather serious decline for the third consecutive day this week, also crossing a strong support in face of the weekly S3 and the monthly S1. This cluster is now providing immediate resistance, with the Bollinger band now bolstering it. Although the prospects are bearish towards the GBP/USD, a possibility of the pair undergoing a corrective rally exists. If the Sterling manages to rise above 1.3950 dollars, we are likely to see the 1.40 level retaken. Contrariwise, with more bearish momentum the slump could extend even beyond 1.38.

• Traders’ Sentiment

  Bulls keep retreating, as 65% of all open positions are now long (previously 67%). The number of buy orders surged from 54 to 57%.

USD/JPY keeps struggling to remain above 112.00

“No matter what happens, investors would buy the yen.”

- Bank of Tokyo-Mitsubishi UFJ (based on Market Watch)

• Pair’s Outlook

  Upon reaching the 111.00 yen, the US Dollar managed to regain the bullish momentum and close trade with a seven-pip rally yesterday. The support cluster circa 111.70, namely the monthly S3 and the weekly S1, once again proved to be strong, but could still give in today. Technical studies are now giving distinctly bearish signals in the daily timeframe, implying that the USD/JPY could fall back towards the 111.00 mark or lower—towards the weekly S2 at 110.67. In case bulls take over the market, we might see the nearest resistance in face of the weekly PP overcome.

• Traders’ Sentiment

  Although not as strong as yesterday, but market sentiment remains bullish at 71% (previously 74%).

Gold headed towards February high

“Gold’s rally since the start of the year, which returned as much as 19 percent at its peak, may be petering out now.”

- Sejul Gokal, Bloomberg

• Pair’s Outlook

  The commodity keeps appreciating after establishing a strong base at 1,210 dollars (up-trend and monthly R3). The objective is now 1,264, namely this month’s current maximum. In case the bulls remain in control of the market after probing this resistance, the next objective could be already as high as 1,307, which is the highest level seen last year. The majority of the technical indicators, however, is against a prolonged recovery—four out of eight are giving ‘sell’ signals, while only one is bullish and the rest are neutral.

• Traders’ Sentiment

  In the meantime, the extent, to which the precious metal is oversold in the SWFX market, is only increasing. The percentage of short positions has grown from 71 to 74% during the last 24 hours.

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