GBP/USD takes a crack at the down-trend

Technical Analysis

EUR/USD: another wide daily range with no results

“The strength in the EUR is unsustainable.”

- Scotiabank (based on Exchange Rates)

• Pair’s Outlook

  Eight consecutive days of neither bullish nor bearish advantage has only ended with emergence of a firm uptrend resistance line for the EUR/USD currency pair. It is now connecting the February high with local April peaks at 1.1460. Despite indecisive trading, it seems that the risks are skewing back to the downside. The key support area to watch is 1.1329/09, where the first weekly demand line is strengthened by the 20-day SMA. Success here would set eye on the 1.12 mark (monthly PP, weekly S3), followed by the March 24 low at 1.1143.

• Traders’ Sentiment

  The bulls continued to push their ideas forward yesterday, but they managed to raise their respective SWFX market share to just 42%, which is one percentage point higher than 24 hours ago. Meanwhile, pending orders stay bearish in 60% or more cases.

GBP/USD takes a crack at the down-trend

“We sell GBP/USD at 1.4450, stop 1.4610. Even if the polls break toward more clearly toward "Bremain" ahead of the 23 June referendum it’s hard to see GBP forcefully unwinding its Brexit premium until the certainty of the vote is out of the way.”

- Westpac (based on FXStreet)

• Pair’s Outlook

  The Cable edged higher on Tuesday, but with gains being limited due to mixed fundamental data results and the four-week down-trend playing its part. There is no room for another rally today, unless supply at the mentioned resistance line is insufficient to cause the GBP/USD currency pair to make a U-turn. In case bears take over the market, we should see a decline towards second support area, namely the weekly PP at 1.4151. On the other hand, a failure to push the pair lower will result in a retake of the 1.43 psychological level, despite it being bolstered by the weekly R1. The second resistance, however, lies out of reach around 1.4480.

• Traders’ Sentiment

  Market sentiment remains bullish at 61%, compared to 64% previously. The share of purchase orders inched up from 58 to 60%.

USD/JPY: downside risks persist

“Given that the market is quite short USD against the EUR and JPY, and with US inflation data also likely to be on the firm side on Thursday, we expect the USD's corrective recovery against the core majors to extend a little further this week.”

- BNP Paribas (based on Business Recorder)

• Pair’s Outlook

  The US Dollar managed to outperform the Japanese Yen on Tuesday, but with gains limited by the immediate resistance in face of the monthly S2. According to technical indicators, the USD/JPY currency pair is now likely to prolong its previous one-week decline, with the closest support located around 107.55, represented by the 18-month low and the Bollinger band. However, the USD now risks establishing a new low, with the second support area resting circa 106.60, namely the monthly S3 and the weekly S1. Technical indicators are bolstering this scenario with their bearish signals, but upbeat US fundamentals might still trigger a rally, causing the Buck to climb over the 109.00 mark.

• Traders’ Sentiment

  Bullish traders’ sentiment return to its last Wednesday’s level of 73%, whereas sell orders are outnumbering the buy ones by only 4% points.

Gold takes break after touching 1,260

“We see sufficient uncertainty mixed with the threat of currency intervention and policy disagreements over negative interest rates to buoy gold prices.”

- HSBC (based on The Bullion Desk)

• Pair’s Outlook

  Tuesday’s trading range of gold prices was very tight, compared to Monday’s one. XAU/USD tested the crucial 1,260 mark, namely the weekly R2, but was eventually forced to come back and close the US evening session near 1,255. A second unsuccessful attempt to breach the 1,260/63 resistance cluster, which is also backed by the February high, would diminish the outlook. The bears are starting to prepare for an attack on a very dense demand between 1,237 and 1,221. Only by closing below the latter (55-day SMA) the bullion will be able to reestablish the negative outlook, which is backed by the daily technical indicators.

• Traders’ Sentiment

  Sentiment among traders of the SWFX market has changed by only one percentage point since yesterday, as about two thirds of all market participants are still maintaining a sceptical opinion on gold.

 

 

 

 

 

 

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