USD/JPY takes another shot at breaching 112.00

Technical Analysis

EUR/USD hits 6-month peak amid rally

“If indeed the aim was to push down the euro, clearly it has not worked at all for over a year now.”

- Societe Generale (based on Bloomberg)

• Pair’s Outlook

  By appreciating for a fourth successive day on Thursday, EUR/USD tested the 1.14 mark for the first time since October. By session-end, however, gains were contained by the last weekly resistance at 1.1390. Friday is going to be very data-dependent. We would allow for a correction down to 1.1337 (weekly R2), in case US labour market data surprises to the upside. This view is still disagreed by the daily technical indicators, as they are indicating to the upside. A spike beyond the 1.14 level risks exposing the October 2015 peak at 1.1495.

• Traders’ Sentiment

  The bears continue keeping 58% of all positions on Friday, thus leaving the bulls with only the 42% share of the market. Meanwhile, 100-pip long commands have seen an abrupt drop. Now they are taking up only a third of all orders, down from 45% yesterday.

GBP/USD muted ahead of NFP data

“The only thing that could push the Fed into more hawkish territory is if they see wage price inflation.”

- BK Asset Management (based on Reuters)

• Pair’s Outlook

  The Cable struggled to pierce the weekly R1 for the second day yesterday and is likely to have issues edging above 1.44 again today. The base case scenario is a corrective decline towards the immediate support cluster, represented by the 20 and the 55-day SMAs, the weekly and the monthly PPs, all around 1.4260. However, technical studies retain mixed signals, creating a possibility of the bullish development to occur, with fundamental data acting as a catalyst. The ceiling would then be the 1.45 psychological level, also being bolstered by the Bollinger band.

• Traders’ Sentiment

  Market sentiment improved over the day, as 59% of all open positions are long (previously 53%). At the same time, the number of purchase orders dropped lower, namely from 52 to 43%.

USD/JPY takes another shot at breaching 112.00

“The Fed looks to be far more Dow-dependent than it is data-dependent. Delivering, say, two rate rises when the market is priced for one is only going to occur if it can be done in a way that isn’t going to be upsetting for global risk sentiment.”

- National Australia Bank Ltd. (based on Bloomberg)

• Pair’s Outlook

  The US Dollar remained relatively unchanged against the Japanese Yen on Thursday, amid mixed fundamental data. Today the Greenback is pressured by the monthly PP and the 20-day SMA just above the opening price, while the weekly PP is providing immediate support at 112.53. In case the resistance cluster is breached, gains are then likely to be limited by the descending channel’s upper border at 113.23. On the other hand, if bears push the USD/JPY currency pair lower, the second target will be the cluster around 111.55. The bearish scenario is more probable, as technical studies are in favour of this outcome.

• Traders’ Sentiment

  There are now 73% of traders holding long positions, compared to 70% on Thursday. Meanwhile, the portion of orders to sell the Buck edged nine percentage points lower, now taking up 64% of the market.

Gold maintains sideways outlook

“If we start to see macro readings out of the United States pick up a head of steam (with a strong jobs number helping) this could prompt a change in the current thinking that the Fed will remain dovish for a long while.”

- INTL FCStone (based on CNBC)

• Pair’s Outlook

  Gold prices attempted to skyrocket again on Thursday; however, by the end of American market session the bears managed to push the bullion down to 1,232 and below the 20-day SMA. Intraday peaks were in turn reaching the 1,240 area. The metal's mid-term intentions are still unclear, because it seems to be fully ignoring the technical cluster between 1,227 and 1,233. Only a plunge under the 1,215 level (March 23/28 lows) will renew talks about more losses down to 1,199/98 where a new monthly S1 is resting now. Daily technical indicators have also moved a bit more into negative territory.

• Traders’ Sentiment

  The distribution between the SWFX's bulls and bears is more or less frozen at 41% vs 59%, respectively. The gap has tightened by only two percentage points over the past 24 hours.

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