Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD ready to test up-trend at 1.0940
“Markets expect something to happen, without having a clear idea of what it might be. It’s kind of this blind faith that the ECB will deliver something.”
- Jefferies International Ltd. (based on Bloomberg)
Pair’s Outlook
EUR/USD neared the 2016 uptrend line at 1.0925 on Friday and managed to stay afloat above this key support. We are closely watching all developments around this demand, while any failure is highly likely to result in a drop down to the monthly pivot point at 1.0841, which is reinforced by the first weekly support 11 pips from the North. On the side of the bears, daily technical studies are mostly pointing to the downside this Monday morning. In the meantime, a spike past 55-day SMA (1.0969) should re-expose 200/20-day SMAs at 1.1045.
Traders’ Sentiment
Bullish SWFX traders are holding a minimal two pp advantage over the bears for a second day in a row. Adding to that, about 55-58% of all pending commands are set to sell the Euro versus the Greenback.
GBP/USD under the risk of falling under 1.38
“The biggest factor behind the dollar's recent rebound is trust in the U.S. economy being resurrected. Reviving expectations for a rate hike by the Fed is a key factor to halt the dollar's recent depreciation.”
- FPG Securities (based on Reuters)
Pair’s Outlook
Strong US GDP figures caused the Cable to retreat from its daily high of 1.4045, ultimately falling to the lowest in six years. According to technical studies, the given pair is likely to undergo another sell-off, with the immediate support in face of the Bollinger band doubtfully limiting the losses. Consequently, the GBP/USD currency pair’s price could fall below the 1.38 level, with the second support area located only around 1.3680. Meanwhile, the monthly S1 and the weekly PP form a rather strong resistance cluster circa 1.3980, in case bulls manage to push the Sterling higher against the Buck.
Traders’ Sentiment
SWFX traders’ sentiment remains bullish, now at 65%, compared to 63% last Friday. At the same time, the number of orders to acquire the British currency added three percentage points, surging up to 58%.
USD/JPY retreats on risk aversion
“We don’t see any fresh trading cues [from the G-20 statement] to support dollar buying.”
- FX Prime (based on Market Watch)
Pair’s Outlook
Although the better-than-expected US GDP caused the Greenback to appreciated against the Japanese Yen on Friday, these gains are under the risk of being erased today. The Yen strengthened today, as a slump in Chinese stocks triggered a return of risk-off sentiment. The pair, however, is supported by the monthly S2 and the weekly PP around 113.45, but losses could even extend towards the 112.00 level, where the weekly S1 coincides with the monthly S3. Technical indicators are bolstering the possibility of this negative outcome, whereas positive fundamentals could still spark a buying spree and stimulate a rebound.
Traders’ Sentiment
Market sentiment remains bullish, but now at 70% (previously 73%). Meanwhile, the share of orders to purchase the US currency increased substantially, namely from 51 to 65%.
Gold: February uptrend holds ground
“Gold still shines as a safe-haven in the current equity rout.”
- OCBC Bank (based on CNBC)
Pair’s Outlook
As long as the bullion keeps trading above the February uptrend, currently at 1,217.36, the outlook will preserve a positive bias for the nearest future. Moreover, any loss should be contained at 1,200 where the price, if it experiences a decline, will inevitably meet another bullish support from January. Moreover, there we also have a location of the 20-day SMA and weekly S1 for the moment. The key target for bullish traders, who are strengthened by daily and weekly technical indicators, is the weekly R1 at 1,249. Success here will put at risk the recent February high at 1,263.
Traders’ Sentiment
While the market share of bulls is unchanged at 27%, it proclaims that the vast majority of SWFX market participants are currently estimating a decline in prices. At the same time, such a bearish-biased distribution may also energize the longs for purchases in the foreseeable future.
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.