EUR/USD remains uplifted near February peak

Technical Analysis

EUR/USD remains uplifted near February peak

“The dollar is "going to be mired in a range”.”

- TJM Brokerage (based on Reuters)

• Pair’s Outlook

  The most traded FX cross refrained from kicking off a recovery in the direction of the 1.15 mark yesterday, as traders are waiting for the FOMC minutes tomorrow and maintaining the wait-and-see mode. Nevertheless, the medium-term projection is the same as 24 hours ago, as we see more upside risks to the price. The closest resistance is the October 2015 peak and the weekly R1. On the other hand, any decline under the weekly pivot at 1.1326 may potentially expose the pair to heavier losses in the direction of the 1.12 area (monthly PP/20-day SMA/weekly S1).

• Traders’ Sentiment

  There are just slightly more than 40% of bullish positions opened in the SWFX market, down from 41% yesterday. Meanwhile, pending orders improved, but most of them are still keeping the bearish bias.

GBP/USD in limbo around 1.4250

“The response from local supports remains corrective only and although sterling prices are evidently trading above 1.4000 at present this key/historic level nonetheless looks vulnerable to attack again going forward.”

- Associated Foreign Exchange (based on PoundSterlingLive)

• Pair’s Outlook

  On Monday the GBP/USD currency pair reconfirmed the six-week up-trend, but recovering from its intraday low and edging over the 1.43 level. However, the Cable was unable to maintain trade that high, with trade ultimately closing just on top of the monthly PP. Resistance remains strong today, but more USD weakness could push the pair higher and once again over the 1.43 mark. On the other hand, supply just above today’s opening price might cause the exchange rate to drop back towards the up-trend, with a chance of the 1.42 psychological level being pierced if fundamentals turn in the Buck’s favour.

• Traders’ Sentiment

  Bullish market sentiment grew stronger over the past 24 hours, as 69% of traders’ are now long the Pound (previously 65%). The share of purchase orders, however, slid from 55 to 53%.

USD/JPY to remain under 111.00

“The yen’s quite sensitive to risk appetite. The Bank of Japan has been pretty ineffective in getting the yen weaker even though we expect further easing from them. It’s just a sense that there’s not a lot the Bank of Japan can do about the yen.”

- Bank of New Zealand Ltd. (based on Bloomberg)

• Pair’s Outlook

  A poor reading of the US Factory Orders caused the USD to weaken against the Yen on Monday, with the Bollinger band limiting the losses. Earlier today BoJ Kuroda’s statement sparked risk aversion to appear in the markets, with the USD/JPY falling lower. No impetus today is expected to turn the tables around and help the pair recover. Furthermore, technical indicators are bolstering the possibility of the negative outcome. The Buck faces a tough support cluster around 110.75, represented by the Bollinger band, the weekly and the monthly S1s, which is to prevent the pair from edging lower. In case this area gives in, the channel’s support line at 110.39 will be the next target.

• Traders’ Sentiment

  Bulls lost some numbers, as 70% of all open positions are long (previously 74%). The number of sell orders increased from 62 to 63%.

Gold volatile before tomorrow’s FOMC minutes

“Gold market participants appear to put more weight on the strength of the US economic data and what that will mean for the Fed's rate decisions.”

- Commerzbank (based on Sky News)

• Pair’s Outlook

  Yellow metal hovered predominantly in the red territory on Monday, but the bears were only capable of pushing the price down to the 1,215 mark and not any below it. Even though we are seeing bullish pressure on early Tuesday, the rally is expected to be contained by a dense resistance cluster between 1,224 and 1,230. Up there, we have got the weekly pivot point, the 23.6% Fibonacci retracement of Dec-Mar uptrend and the 20-day SMA. The base scenario suspects a correction lower from here, but in case the bulls overcome this supply, the next immediate target will become the 1,241 mark represented by the monthly pivot point and the weekly R1.

• Traders’ Sentiment

  About 54% of all transactions in the SWFX market keep betting that the precious metal will lose value in the foreseeable future. This is down from the 55% share that the bears had held yesterday morning.

 

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