GBP/USD takes another shot at 55-day SMA

Technical Analysis

EUR/USD takes a break near 1.12

“Markets are wary that Yellen will reaffirm the cautious FOMC statement, undermining dollar-specific optimism.”

- ANZ Bank New Zealand (based on Bloomberg)

• Pair’s Outlook

  Weak US personal spending data helped the EUR/USD cross to add value on Monday, as it closed below 1.12 after testing the 23.6% Fibonacci retracement of the March 2016 uptrend at 1.1220. The cap is being provided by the weekly pivot point at 1.1197, but bullish daily and weekly technical indicators raise hopes that the common currency will breach its initial resistance area today. A failure here should diminish the pair's optimism. We see the 1.1060/40 zone as a vital support, where 55/200-day SMAs are joined by the March 16 low.

• Traders’ Sentiment

  Now the difference between the bulls and bears is only eight percent, down from 10% on Monday and 12% back on Friday. In the meantime, reliably more than 50% of all pending orders are now set to acquire the Euro against the Greenback.

GBP/USD takes another shot at 55-day SMA

“PCE turned out weaker than expected and I think the market is reacting to that by driving the dollar lower.”

- Boris Schlossberg, BK Asset Management (based on 4-traders)

• Pair’s Outlook

  With most of the US data disappointing yesterday, the Sterling was able to outperform the US Dollar and not only climb over the 1.42 level, but nearly even reach the 1.43 mark. The 55-day SMA around 1.4280 was the level to limit yesterday’s upside volatility, continuing to provide solid resistance today. Although the 20-day SMA and the weekly PP form a strong support cluster just below the opening price, the pair could still retreat towards the monthly PP at 1.4141. On the other hand, the Cable might even surge towards 1.4446, namely the monthly R1, depending on the impact of Yellen’s speech later today.

• Traders’ Sentiment

  Bullish traders’ sentiment remains unchanged, with 63% of all open positions still long. Meanwhile, there are three percentage points less orders to buy the British Pound, namely 56% of them.

USD/JPY: channel’s upper border at risk

“A clearer picture of (the first quarter) is coming together now, and it's not looking like a particularly strong quarter for the U.S.”

- Westpac Banking Corp. (based on Reuters)

• Pair’s Outlook

  Even though the USD/JPY currency pair closed trade at the descending channel’s resistance line, upside risks are now higher. A failure to reacquire the bearish momentum today is to lead to the breakout of the channel, with the closest resistance located at 113.85, represented by the weekly R1. In case the immediate resistance is pierced, we should then see the Buck retake the 114.00 yen level and eventually put the tough cluster around 114.75 to the test. However, due to mixed technical indicators in the daily timeframe, there is a possibility that Fed Yellen’s dovish statement will push the pair lower towards the weekly PP at 112.53, therefore, preserving the bearish channel.

• Traders’ Sentiment

  Today 71% of traders hold long positions (previously 74%), while all pending orders are equally divided between the buy and the sell ones.

Gold hovers sideways at 1,215/20

“If (Yellen) reinforces recent sentiment expressed by some of governors, we could see further dollar strengthening and corresponding pressure on gold.”

- INTL FCStone (based on CNBC)

• Pair’s Outlook

  On Monday the bullion was turbulent, as initially the bears led a decline below 1,210. However, all losses were erased by the end of the day, with falling Greenback sending gold back above 1,220. Over the next 24 hours, any spikes to the upside or dips lower can be wide. This is because the closest resistance is placed as far as 1,227 and the nearest support line in the monthly pivot point at 1,205. Aggregate daily indicators suspect XAU/USD will retreat today, but only a decrease below the 55-day SMA at 1,193 will, with a decent level of confidence, confirm bearish intentions of the market.

• Traders’ Sentiment

  On Tuesday morning bullish positions have been held by 47% of SWFX traders, which proclaims a surge from 44% just one day ago. This is the most positive sentiment with respect to the yellow metal in almost four weeks.

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