Technical Analysis
EUR/USD
EUR/USD hangs above 1.2856/26
“The euro fell towards the 200-day SMA and we saw it rebound ahead of that level. We are expecting the euro to continue to consolidate between there and $1.31 until we can get any major new catalysts”
- Forex.com (based on CNBC)
Pair’s Outlook
Buying pressure at 1.2856/26 in conjunction with support at 1.2796/82 is keeping the pair from declining. As long as they stay intact, positive bias will be preserved. Otherwise, levels at 1.2717/1.2697 and 1.2589/59 will come under threat. EUR/USD is expected to lift from 1.2856/26, climb over some of the obstacles overhead, such as 1.2930/63 and 1.3063, and reach 1.3327—a major downtrend resistance line before a long term decline.
Traders’ Sentiment
The share of bulls in the market continues to increase, although they still remain in minority (45%) and therefore the overall sentiment of traders is slightly bearish. As for the orders, 52% are to buy the greenback and 48% are to sell it against the single European currency.
GBP/USD
GBP/USD recovers from 1.5988/74
“We will prefer to play sterling/dollar for the downside. The fiscal and monetary fundamentals suggest the pound will stay under pressure even if there is an economic recovery”
- UBS (based on Reuters)
Pair’s Outlook
As was suspected, GBP/USD initiated a bullish correction, but is deemed to possess a lack of upward momentum in order to surge up to 1.6212 and then violate it. The nearest resistance that is likely to halt the current rally is located at 1.6062/85, while extension of the move could result in an encounter with 1.6139/43. In the meantime, dips are to be contained by 1.5988/74.
Traders’ Sentiment
Appetite for short selling does not increase, but persists in the market, as 62% of opened positions are bearish. Accordingly, the rest 38% of market participants believe the British Pound has potential to gain value. The ratio between buy and sell orders is 46% to 54%, respectively.
USD/JPY
USD/JPY pushes through 78.14/77.99
“In the absence of a compelling growth story outside of the U.S., the dollar is not as unattractive as it was two years ago”
- Citi (based on MarketWatch)
Pair’s Outlook
Support at 78.14/77.99 appears to be unable to stop depreciation of the U.S. Dollar, implying that USD/JPY may fall as low as 77.55/37 in near future, since there are no more notable levels in-between. If the currency pair still steps lower, however, it may challenge 76.99/95, although long-term outlook remains bullish, the view that is supported by forecasts for the next three quarters.
Traders’ Sentiment
Stance of market participants towards USD/JPY is largely unchanged since yesterday, being that 71% of traders are currently long and only 29% are short on the currency pair. The fact that the portion of buy orders is 84% of the total amount, gives an even stronger “buy” signal.
USD/CHF
USD/CHF gets rejected by 0.9406/44
“In the short term, it looks like the dollar is going higher”
- Westpac Banking Corp. (based on Bloomberg)
Pair’s Outlook
An attempt to breach 0.9406/44 proved to be unsuccessful. Now the price is headed towards 0.9357/40 to confirm whether a change of polarity principle holds for the recently penetrated downward sloping line, which is now supposed to be a support level. USD/CHF may decline down to 0.9268/44, but is nonetheless viewed as bullish in the long run.
Traders’ Sentiment
Considering uncontested dominance of bulls on USD/CHF, who constitute 74% of the market, SWFX marketplace sentiment is positive with respect to the pair. Insight provided by orders is not as unequivocal, since 54% of them are to buy and 46% are to sell the U.S. Dollar.
