Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD eases below 1.1220, sets eye on 1.1145
“Evans’s comments are taken hawkishly by the U.S. dollar.”
- Westpac Banking Corp (based on Bloomberg)
Pair’s Outlook
Inside the current triangle pattern (boundaries at 1.1310 and 1.0860), EUR/USD is now descending to the South. Yesterday it slid below the weekly PP, monthly R1 and 23.6% Fibonacci retracement of this month's earlier climb. The primary target is the 38.2% retracement at 1.1145, followed by the 20-day SMA ten pips from below. The ultimate long-term bearish goal seems to be the pattern's lower bound at 1.0860. However, daily indicators continue supporting the bulls. Moreover, the 55-day SMA is going to breach the 200-day SMA to the upside soon, which is going to be a positive sign.
Traders’ Sentiment
Over the previous 24 hours the SWFX market sentiment has been pretty much steady at 43-57%.
GBP/USD struggles to maintain trade above 1.42
“The attack in Brussels, on the back of terrorist attacks in Turkey over the weekend ... is bad news for the U.K., because it plays into the hands of those who want to leave, thinking that somehow if they leave they're safe.”
- Brown Brothers Harriman (based on CNBC)
Pair’s Outlook
Upon retaking the 1.44 psychological level on Tuesday, the Pound suddenly made a U-turn and slumped to 1.42, amid the events in Brussels. The Sterling now faces a support cluster around 1.4170, represented by the 20-day SMA, the weekly S1 and the monthly PP. Technically, we should see the GBP/USD currency pair undergo a correction today and attempt to reach the 1.43 mark again, but there is still sufficient room to a decline towards the immediate support cluster’s last level—the monthly PP at 1.4141. This PP held the Sterling from edging lower against the Buck since the beginning of the month and is likely to keep the Cable afloat if bears take over the market.
Traders’ Sentiment
Bullish sentiment grew stronger, as 63% of traders are now long the Pound (previously 58%). The portion of buy orders slid from 60 to 56%.
USD/JPY under the risk of plunging under 112.00
“The news is having impact on sentiment. Safe-haven currencies are being supported on the headlines.”
- Nomura (based on Reuters)
Pair’s Outlook
The Greenback extended its gains against the Yen on Tuesday, breaching the immediate resistance in face of the weekly PP. The US Dollar is expected to prolong its rally, but with gains limited by the 113.00 major level, which in turn is reinforced by the 20-day SMA. The USD/JPY pair’s main target is the descending channel’s resistance line around 113.50, but setbacks might also occur, as technical indicators suggest. The exchange rate could return back below the 112.00 mark and find support only around 111.44, represented by the Bollinger band.
Traders’ Sentiment
Today 74% of all open positions are long, one percentage point up since yesterday. At the same time, the buy and the sell orders broke out of the equilibrium, with sell ones now taking up 63% of the market.
Gold to plunge below 1,235 in volatile trading
“Particularly in the U.S., this slow normalization of the economy should result in a grind higher in real interest rates and cap the attractiveness of precious metals as an investment.”
- BMI Research (based on CNBC)
Pair’s Outlook
The bullion's activity is very high this Wednesday morning. Following the bullish failure to push prices anywhere beyond the 1,250 level, today we are seeing a heavy selling pressure. The most immediate support is the two-month uptrend located at 1,235; however, we suspect that formidable bearish sentiment will lead to a testing of the 1,230 area that consists of the weekly S1 and 23.6% Fibonacci retracement of Dec-Mar uptrend. Closure under 1,227 will signify that gold is ready to tackle the 1,205 mark where the monthly pivot point merges with the second weekly demand line.
Traders’ Sentiment
Tuesday has seen an additional improvement in terms of the bullish side of SWFX positions. It added one more percent to increase up to 35% by the March 23 morning.
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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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