Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD spikes back to reach 55-day SMA
“People reduced expectations that the ECB is going to be so dramatic next week with their policy decision.”
- BMO Capital Markets (based on Reuters)
Pair’s Outlook
In the run up to Friday’s US payrolls data, the EUR/USD cross skyrocketed the most since February 9 and retested the January-February uptrend line. The bulls were limited by the 55-day SMA, currently at 1.0970. This moving average is succeeded by another bunch of resistances including the 20-day SMA, weekly and monthly pivot points. Ultimately, there is the 200-day SMA placed at 1.1045. An advance above all of them should neutralise our outlook for next week, also noting that weekly technical indicators are expecting a sideways movement starting March 7.
Traders’ Sentiment
More SWFX traders have decided to join the bullish camp and push the number of open positions from 51% up to 53%. However, commands are now set to sell the Euro against the Buck in 57-58% of all cases.
GBP/USD endeavours to climb over 1.42
“The U.S. dollar has been responding to the improving tone of U.S. data, which has brought forward market expectations for the timing of the next Fed hike. The ADP report suggested the risks to Friday’s nonfarm payrolls report are on the upside.”
- Bank of America Corp. (based on Bloomberg)
Pair’s Outlook
The British Pound appreciated for the fourth consecutive day against the US Dollar yesterday, piercing the immediate resistance around 1.4155. This area is now providing support and could spark a Sterling buying spree, which would then lead to a retake of the 1.42 level and, consequently, to a breach of the nearest resistance, namely the 20-day SMA at 1.4222. However, the main Cable driver today will be the US NFP results, a stronger figure of which could cause the pair to retreat from its one-week high and slump back under 1.41, possibly even putting the weekly PP at 1.4012 to the test.
Traders’ Sentiment
Bulls are barely outnumbering the bears, as only 52% of all open positions are currently long (previously 40%). At the same time, the portion of orders to sell the Sterling decreased from 70 to 63%.
USD/JPY takes another shot at retaking 114.00
“Investors will find it difficult to take strong positions on one side. The dollar will unlikely gain much against the yen in either case [depending on NFP results].”
- Minori Uchida, Bank of Tokyo-Mitsubishi UFJ (based on Reuters)
Pair’s Outlook
A set of poor fundamentals caused the American Dollar to retreat from its intraday high and close trade relatively unchanged against the Yen, adding only 20 pips on Thursday. The USD/JPY currency pair remains supported by the weekly PP at 113.00, which is now also bolstered by the 20-day SMA. As a result, we expect the bullish momentum to prevail, but gains are likely to be limited by a strong resistance area around 115.00, represented by the weekly R1, the monthly PP and the Bollinger band. On the other hand, daily technical indicators are now giving bearish signs, suggesting that with sufficient impetus from weak NFP data the nearest support could be pierced.
Traders’ Sentiment
Exactly three quarters of all open positions are long, while the share of purchase orders returned to its Wednesday’s level of 57%.
Gold at new annual highs on weaker Greenback
“Gradual pace of tightening will be maintained in the context of China risks, global financial volatility and the knock-on impact on the U.S. economy.”
- Mizuho Bank (based on CNBC)
Pair’s Outlook
Yellow metal brought substantial returns on March 3 when the price surged to almost the 1,270 mark from 1,240 in one day. With markets becoming more volatile ahead of NFP data from the US, the Dollar pared gains and provided gold with upward momentum. The high of Feb 11 at 1,263 was penetrated and now the price is hovering at peaks last seen in February 2015. Today is a highly data-dependent day. Disappointing payrolls may push the bullion to weekly R2 (1,277) with a possibility of growing even closer to 1,300. Alongside, good data will help the bears to reclaim the weekly R1 at 1,249.
Traders’ Sentiment
24 hours ago the bullish market portion dropped back to 41% from 50% seen back on Wednesday. Over the last trading session they have regained only one percent to 42%, meaning the bears are managing to.
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.
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