Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD to tackle April high amid rally
“Markets are not expecting the Fed to do much ... so that’s putting some downward pressure on the dollar.”
- Mizuho Corporate Bank (based on Reuters)
- Pair’s Outlook
Advance of the Euro against the Greenback was stretched over the American session on Friday, as the market allowed for a spike up until the 1.1450 mark. Although the pair fell short of reaching the April high at 1.1465, we foresee such a scenario later in the new week. However, at 1.1468 the bulls will face another resistance represented by various 2015-2016 peaks in this area. The second supply for this week is placed at 1.1538 (weekly and monthly R1). In the meantime, dips lower are still expected to be shallow and the weekly/monthly pivot points are expected to act decisively at 1.1376.
- Traders’ Sentiment
SWFX traders remain 60% short with respect to the Euro. Pending orders are divided equally between the bulls and bears in a 50-pip range from the spot price, while 100-pip commands are 55% long.
GBP/USD attempts to climb over 1.46
“If the U.S. data continues to disappoint, things may look different for the dollar.”
- Credit Agricole SA (based on Bloomberg)
- Pair’s Outlook
The GBP/USD currency pair remained relatively unchanged on Friday, with the pair edging only 5 pips higher over that day. The Cable is expected to continue climbing higher today, with the nearest resistance located only around 1.4710. However, there is insufficient impetus for a rally that high today, with price likely to close near the 1.4650 mark. Technical indicators are giving bullish signals, bolstering the possibility of the positive outcome. On the other hand, the Sterling also risks remaining below the 1.46 major level, with the closest area to limit the losses being the weekly PP at 1.4563.
- Traders’ Sentiment
Today 52% of all open positions are short, compared to 54% on Friday. Meanwhile, the portion of orders to sell the Pound edged lower, namely from 65 to 56%.
USD/JPY under the risk of slumping under 106.00
“There still remain the aftereffects of the BOJ’s inaction.”
- Mitsubishi UFJ Morgan Stanley (based on Market Watch)
- Pair’s Outlook
The US Dollar experienced another relatively sharp decline on Friday, falling below the 18-month low of 107.63. The Greenback now could undergo a corrective rally, despite the Bollinger band providing immediate resistance around 106.25, just above the opening price. Meanwhile, technical indicators are giving mixed signals in the daily timeframe, implying that the possibility of bullish development exists. However, weak US fundamentals might cause the USD/JPY currency pair to weaken for the third consecutive time and fall under the 106.00 psychological level.
- Traders’ Sentiment
There are 72% of traders holding long positions today, opposed to 74% on Friday. At the same time, 55% of all open orders are to sell the American Dollar, compared to 57% at the end of the previous week.
Gold at 15-month peak as haven demand surges
“With the majority of Asia out today and London on holiday tonight we are expecting a range-bound session. However as gold trades towards $1,300, days of thin liquidity can throw up surprises.”
- MKS Group (based on CNBC)
- Pair’s Outlook
On Friday gold prices were a subject to the sharpest rally since mid-March. Daily increase, which amounted to more than 2%, brought the spot to the 1,292.10 mark by session-end, up from 1,232.66 last Monday. Considering continuous weakness of the Greenback, climbing haven demand and bullish technical indicators, we are not ruling out a testing of the 1,300 major psychological mark, followed by the 2015 high at 1,307.06. The fresh monthly pivot is expected to contain any short-term loss at 1,265.92. Volatility will likely remain uplifted for some period of time.
- Traders’ Sentiment
Sentiment of the SWFX market tanked over the weekend, as various bullish transactions were forced to close amid large-scaled profit-taking. There are only 33% of long open positions on Monday morning, down from 36% before the weekend.
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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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