Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD awaits another impetus
“The dollar rally will come more from economic weakness elsewhere than the strength in the U.S. economy.”
- Societe Generale (based on Bloomberg)
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Pair’s Outlook
EUR/USD pair fluctuated with no broad changes on Thursday, similar to those the same cross had posted back before Wednesday for eight consecutive days. The exchange rate is therefore currently guided by the weekly S2 at 1.1264, but the mid-term bearish focus is keeping eye on the 1.12 zone that is backed by the monthly pivot and weekly S3. Additionally, the 55-day SMA is sloping to the North near 1.1169 and will provide extra demand. Dips below here are unlikely over Friday, also because the indicators are predominantly long on the Euro.
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Traders’ Sentiment
42% of all SWFX positions are bullish in the morning on Friday, no change for a third day in a row. On the other hand, pending orders set to trade the EUR/USD currency pair have finally moved in a positive direction to become 46-47% long (less than 40% yesterday).
GBP/USD: risks skewed to the downside
“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 Global Strategy Group (based on PoundSterlingLive)
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Pair’s Outlook
On Thursday the Sterling declined against the US Dollar, with the nearest support, namely the weekly PP, managing to limit the losses. Ever since the Cable bounced back from the five-week down-trend, the exchange rate kept edging lower. The weekly PP retains its role of the nearest support, but is unlikely to prevent the GBP/USD currency pair from falling deeper down. In this case the bearish momentum could extend towards the newly-formed falling wedge’s support line at 1.4020, which is reinforced by the Bollinger band, the weekly and monthly S1s. Meanwhile, technical indicators are bolstering the possibility of the negative outcome.
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Traders’ Sentiment
Bullish sentiment remains unchanged at 64%, whereas the portion of orders to acquire the Pound increased from 45 to 54%.
USD/JPY continues to edge higher
“Over the past few days, the yen’s excessive appreciation has slightly been corrected.”
- Haruhiko Kuroda, Bank of Japan Governor (based on MarketWatch)
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Pair’s Outlook
In spite of the poor US inflation data yesterday, the USD/JPY currency pair remained relatively unchanged. The weekly PP and the monthly S2 keep providing immediate support for the pair around 109.90, while the nearest resistance is still represented by the monthly S1, the weekly R1 and the 20-day SMA circa 110.75. Even though technical indicators keep giving bearish signals, bulls are still expected to push the Greenback higher against the Yen today. The Buck has been appreciating ever since it rebounded from the 18-month low on Monday, making its way towards the ten-week down-trend around the 112.00 major level.
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Traders’ Sentiment
Bulls take up 72% of the market, compared to 74% previously. At the same time, the number of sell orders inched up from 51 to 65%.
Gold hits 55-day SMA, eyes rebound from here
“The rally earlier this week was tied to the strength of Japanese yen and risk aversion. But that has retreated now.”
- a Hong Kong-based gold trader (based on CNBC)
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Pair’s Outlook
The bullion posted another ultra-negative session on Thursday, by slumping as low as 1,229 by the end of US trading. Yesterday it eroded the weekly pivot point and the 20-day SMA resting around 1,232/35, thereby refocusing our attention to the formidable demand is face of the 55-day SMA at 1,225. We estimate no immediate failure of the bulls in recovering from here, meaning some bullishness is possible today. It is also indicated by strongly long weekly technical indicators. However, any descent below the moving average is going to affirm that gold maintains a clear medium-term selling mode.
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Traders’ Sentiment
A continuous plunge in gold prices is provoking a closure of short positions in the SWFX market. Over Thursday the percentage of bearish trades dipped from 63% to 61%.
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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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