EUR/USD eyes 1.2337/34
“I think the risk or the bias here is perhaps a bit more short squeeze in the euro to the upside”
- Sim Moh Siong, Bank of Singapore (based on Reuters)
EUR/USD was unable to sustain a rally above 1.2407/56 and is currently headed towards the nearest support level at 1.2337/34. Extension of the dip will encounter 1.2259/26, but it is also expected to give in eventually and thus pave the way to 1.2061/1.1996. In the meantime, if the rallies do occur, they are likely to be capped by a key resistance area at 1.2625/44, thereby preserving long-term bearish outlook.
The Euro has returned its title of the most popular currency in SWFX marketplace, being currently acquired in 62% of cases. In the pair with the greenback, however, sentiment towards it is neutral, since 52% of traders are long and 48% are short on EUR/USD.
GBP/USD to bounce off 1.5540/17
“After the latest GDP figures there is a sense that the economy is doing worse than going sideways, it is in a proper recession which is not helping the economy”
- FXPro (based on Reuters
Recovery of the cable proved to be short-lived as the currency pair has slipped before reaching 1.5731/74 and is rapidly returning to an uptrend support at 1.5540/17. GBP/USD has already pierced through 1.5624/08 and 1.5589, but should be stopped by 1.5540/17. Additional supports lie at 1.5466/50 and 1.5383, though are unlikely to be tested today.
SWFX traders’ sentiment remains unchanged since yesterday and 48% of market participants stay bullish and 52% stay bearish on the pair. The situation with orders is quite similar and does not reveal preferences of traders as well, as 54% of orders are to buy the Sterling and 47% are to sell it against the U.S. Dollar.
USD/JPY rebounds from 78.08/77.89
“The Bank of Japan looks set to keep policy unchanged. Without any impediment from the Bank of Japan, we’ll see more of the same, that gradual grind lower in the next few sessions and coming months for dollar-yen”
- Bank of New Zealand (based on Bloomberg)
USD/JPY commences another attempt to recover after breaking out of a downtrend resistance. According to technical indicators the bullish momentum, however, is not strong enough to be capable of overcoming all the resistances that are scattered overhead and are preventing prolonged rallies. The initial obstacle is located at 78.42/43, followed by 78.71 and 78.95/79.11.
The Japanese Yen is being sold on average in 75% of trades involving its crosses. Accordingly, the ratio between bulls and bears on USD/JPY is three to one, respectively. As for the orders, 57% of them are to acquire the greenback and 43% are to sell it against the Yen.
USD/CHF is slowly advancing towards 0.9738/40
“Investors are less pessimistic about the euro zone situation. There is the expectation that something positive will come out of the ECB plan and so investors are more willing to search for risky assets that look attractive”
- Barclays Capital (based on CNBC)
Buying pressure at 0.9680/41 did not manage to lift the currency pair considerably, leaving it below an uptrend. Nonetheless, bullish activity by USD/CHF is still expected to be reignited, which in turn is supposed to lead to gains until 0.9952/1.0003 in the medium-term. Notable supports are at 0.9583 and 0.9519/0.9478 and should contain dips.
Being that the Swiss Franc is the second least popular currency after the Japanese Yen, an overwhelming majority of traders (71%) hold long positions, expecting USD to appreciate. On the other hand, most of orders (56%) placed on USD/CHF are to buy the swissie.