EUR/USD ready to tackle weekly R1 at 1.1341

Technical Analysis

EUR/USD ready to tackle weekly R1 at 1.1341

“That’s the perfect central-bank statement -- no change, no reaction, so that is perfection from the Fed’s point of view, well-choreographed.”

- UBS Wealth Management (based on Bloomberg)

• Pair’s Outlook

  Third consecutive session was finished with gains for the Euro, but somewhat hawkish Federal Reserve prevented a spike above the weekly R1 at 1.1341. Likelihood of another testing of this resistance is high, given that from below the EUR/USD pair is backed by the weekly pivot point and 20-day SMA. The rally should ultimately pave the way for additional purchases, as the cross will be bid until 1.14 (April 21 high) where it is going to face a stronger downside pressure. Meanwhile, indicators on a daily time frame are mixed today.

• Traders’ Sentiment

  Only 42% of all market participants keep maintaining the bullish stance on the matter, down from 43% yesterday. Pending orders placed within 100 pips from the current market prices are almost equally distributed between the bulls (52%) and bears (48%) this morning.

GBP/USD attempts to prolong bullish trend

“Investors will start to shift back to the Fed being the main driver of currencies if FOMC officials start to signal a June hike in the next few weeks after yesterday’s less dovish Fed meeting.”

- Royal Bank of Scotland (based on Bloomberg)

• Pair’s Outlook

  The GBP/USD currency pair underwent a small correction on Wednesday, being weakened by the FOMC statement. Nonetheless, the Cable remained above the immediate support area, namely the weekly R1, which keeps the pair elevated even today. The Sterling has the potential to erase yesterday’s losses and climb over the 1.46 major level, with the nearest resistance being the Bollinger band, the monthly R1 and the weekly R2 around 1.4620. The medium-term trend has been bullish for almost four weeks now, with the Pound expected to continue edging higher until the resistance line around 1.49 is reached.

• Traders’ Sentiment

  Traders’ sentiment shifted to the bearish side today, as 52% of traders are now short the British Pound (previously 47%). The number of buy orders, however, edged up 15% points, having risen up to 60%.

USD/JPY suffers from BoJ decision

“It was inevitable that the yen regained all the losses made on easing expectations. Sure, the market was disappointed, but that does not mean the yen will keep gaining.”

- FPG (based on CNBC)

• Pair’s Outlook

  The FOMC statement had no effect on the USD/JPY currency pair yesterday, as the exchange rate remained relatively flat for the second day in a row. The BoJ statement today, however, had a devastating effect on the pair, strengthening the Yen and causing the pair to drop to the 109.00 major level, where the weekly S1 coincides with the monthly S2. This cluster is the final frontier before the Greenback falls back towards the 18-month low of 107.63. A disappointing US GDP reading today could provide sufficient impetus for such a drop, while a good reading is likely to contribute to a recovery, pushing the Buck above the 110.00 mark.

• Traders’ Sentiment

  Today 74% of traders long positions, compared to 72% on Wednesday. At the same time, the share of buy orders slid from 70 to 48%.

Gold continues to appreciate gradually

“The longer the Fed holds off on raising rates, the better for gold.”

- HSBC (based on Reuters)

• Pair’s Outlook

  The precious metal has finally dealt with the closest resistance cluster represented by the monthly and weekly pivot points at 1,241/43. Now the doors are open for extension of the rally up until the following supply at 1,258/63. There the bullion is going to face the weekly R1, which is backed by the upper Bollinger band and February high. In spite of strongly positive daily and weekly technical indicators, gold may turn bearish near that important zone and commence a correction lower. Nevertheless, deep sell-offs are not a part of the short-term scenario amid a formidable support sector around 1,243/36.

• Traders’ Sentiment

  58% of all traders assume gold is going to be a subject to losses in the foreseeable future, as this is the percentage of short positions opened at the moment. The bulls are holding a deep minority (42%) of all transactions, no change over the past trading session.

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