Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD plans to attack 200-day SMA
“The Fed is aware that the pain from a strong dollar is a lot worse in some parts of the country than the headline suggests.”
- TD Securities (based on Bloomberg)
Pair’s Outlook
EUR/USD advanced for a third trading day in a row on Monday and neared the monthly pivot point at 1.1021, which is succeeded by the 200-day SMA at 1.1045. Bullish momentum is strong, and it was able to reverse earlier intraday losses yesterday. We are now looking for an attack on the biggest moving average line, a spike above which will further increase upside risks. Nevertheless, daily technical studies continue to disagree with this idea, but to activate the bearish outlook the pair has to close below the 55-day SMA and weekly pivot point at 1.0974/58.
Traders’ Sentiment
While the distribution between the longs and shorts is unchanged at 48-52%, pending orders are now set to acquire EUR against USD in 53-57% of all cases depending on the range from the current spot price.
GBP/USD under the risk of returning under 1.42
“The short-covering rally in sterling/dollar has probably run its course. Further gains in the pound look tough, given all the worries about 'Brexit'.”
- London-based spot trader (based on Business Recorder)
Pair’s Outlook
The British Pound surprised with its performance for another day, as demand at the monthly PP was sufficient to cause the Cable to recover from its intraday low and edge 45 pips higher. The 20-day SMA remains the immediate support today, but is not strong enough to prevent the GBP/USD currency pair from declining if the bearish momentum prevails. The cluster around 1.4125, on the other hand, is likely to limit the losses, as technical studies suggest. However, we should not rule out the possibility of the bulls pushing the pair towards the first resistance area, located around the 1.44 major level.
Traders’ Sentiment
Today 57% of traders hold long positions, compared to 56% on Monday. Meanwhile, the portion of orders to acquire the Sterling inched 7% points higher. The orders now take up 59% of the market.
USD/JPY journeys below 113.00
“The dollar/yen is a bit soggy today. There are still plenty of people who want to sell the dollar, and lock in their recent gains.”
- Global-info Co (based on Reuters)
Pair’s Outlook
Once again the Greenback made a U-turn after having edged closer towards the 114.00 level, resulting in a 50-pip slump over the day. The nearest support, however, played its part and succeeded in stopping the USD/JPY from falling deeper. Today the US Dollar is likely to retain its post wage data weakness, allowing the Yen to take the upper hand and benefit from its safe haven status. The 20-day SMA is supporting the pair around 113.27, but according to technical indicators the Buck could drop beyond the 113.00 mark and even reach the second support area around 112.20, represented by the weekly S1 and the Bollinger band.
Traders’ Sentiment
Bullish sentiment barely changed, as 71% of all open positions remain long. The share of buy orders, on the other hand, slid from 62 to 49%.
Gold inches higher in silent trading
“A lot of traders are trying to anticipate a 'no rate hike' scenario, causing a bit of an increase in gold.”
- Phillip Futures (based on CNBC)
Pair’s Outlook
Monday has been a broadly calm day for global markets and the safe-haven metal booked somewhat muted volatility readings. Alongside, trading volume decreased to the lowest level in three working days. Notwithstanding current silence, the broad outlook for gold remains optimistic for the moment. XAU/USD is hovering above the weekly pivot point (1,251) and is expected to pick up in the direction of the first weekly resistance (1,287) soon. To expose the 2015 high at 1,307 the bullion should surge above the monthly R1 placed at 1,295.
Traders’ Sentiment
Bullish share in the SWFX market advanced to 43% by Tuesday morning, while yesterday the same reading stood at 41%. Despite that, it proclaims that the market is still favouring a correction to the downside in the great majority of all cases.
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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