USD/JPY continues to climb higher

Technical Analysis

EUR/USD plunges after testing 1.16

“On the euro side, investors are betting that the ECB is willing to tolerate a somewhat stronger currency, hoping that its latest policy measures to stimulate domestic demand in the euro zone will bear fruit before long.”

- Credit Agricole (based on Bloomberg)

• Pair’s Outlook

  First part of Tuesday was distinctly bullish for the Euro, as this currency skyrocketed to another multi-month high above the 1.16 mark. However, as soon as it neared the weekly and monthly R2 resistance lines at 1.1619/26 the bears have finally decided to develop momentum. It turned to be successful, because EUR/USD closed the session with a 38-pip loss just under the 1.15 mark. If the bearish impetus is sustained, we are likely to observe a quick return down to the weekly and monthly pivots at 1.1376. However, while trading above them the outlook will remain largely optimistic.

• Traders’ Sentiment

  Six out of ten SWFX market participants are holding short positions on the Euro. Alongside, the majority of pending orders are now set to get rid of the European currency in favour of the Greenback.

GBP/USD attempts to retake 1.46

“Even if immediate Sterling strength ultimately proves corrective further gains appear likely in coming sessions. Some resistance will probably emerge around 1.4750 but looking ahead an extension nearer to 1.5000 is achievable before strong resistance is encountered again.”

- Associated Foreign Exchange (based on PoundSterlingLive)

• Pair’s Outlook

  The British Pound retreated from its intraday gain on Tuesday, weakened by the UK Manufacturing PMI, with price ultimately closing with a 138-pip loss. Even though technical indicators retain bullish signals in the daily timeframe, the GBP/USD currency pair risks sustaining another sharp decline today. In this case the exchange rate is to fall towards the immediate support cluster around 1.4440, represented by the weekly S1 and the monthly PP. A drop beyond this level would imply a fall towards 1.4385, where the 20-day SMA coincides with the 100-day one. On the other hand, positive fundamentals could help the Cable retake the 1.46 major level today.

• Traders’ Sentiment

  Traders’ sentiment is now bullish, taking up 54% of the market, whereas the portion of buy orders edged lower from 51 to 47%.

USD/JPY continues to climb higher

“Net USD longs dropped even further last week. Positions are at their lowest since June 2014 just prior to the sharp increase in USD buying in H2 2014.”

- Rabobank (based on WBP Online)

• Pair’s Outlook

  The USD/JPY currency pair remained relatively unchanged for the second day yesterday, having inched only 17 pips higher. After a sharp two-day slump at the end of the previous week, the Greenback appears to have entered a corrective bullish trend. Although gains are not substantial, the pair is expected to edge higher for the third consecutive day. Immediate resistance is represented by the 20-day SMA, the weekly and the monthly PPs around 108.50. Meanwhile, the nearest area to limit the dips, in case US Services PMI disappoints today, is located circa 105.40, namely the Bollinger band and the 20-month low, as technical studies retain mixed signals.

• Traders’ Sentiment

  Today 71% of traders hold long positions (previously 72%). At the same time, the portion of buy orders plunged from 72 to 46%.

Gold eases for first time in seven days

“The difficulty gold is experiencing in staying above $1,300 does not necessarily mean the bull rally is ending. But the rally may be tired and in need of consolidation. This can trigger profit-taking.”

- HSBC (based on CNBC)

• Pair’s Outlook

  The bullion failed to set another 15-month record yesterday, after American session was largely marked by the Greenback's rebound. Gold futures closed the trading around 1,286.50, but weakness is at risk of prolonging through the next 24 hours of market activity. The key support is placed at 1,272.92, namely the weekly pivot point, followed by the second demand precisely $20 below it (monthly PP). Dips lower are unlikely, also given that the mentioned monthly pivot is additionally backed by the April 29 low.

• Traders’ Sentiment

  After a short-term recovery 24 hours ago, the SWFX market participants decided to reopen some part of new bearish positions. It pushed the short share up to 61% from 57% on a daily basis.

 

 

 

 

 

 

 

 

 

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