EUR/USD set to decline

Technical Analysis

EUR/USD set to decline

“For the time being it seems likely that Draghi will stick with attempting to talk the euro lower.”

- Rabobank (based on CNBC)

• Pair’s Outlook

  Since the daily and weekly technical indicators are mostly bearish, the immediate resistance, namely the 55-day SMA and monthly PP at 1.3630/09, should be safe. Accordingly, the currency pair is more likely to move South, where it is going to meet the monthly S1 and up-trend line at 1.3568/63. If the selling persists beyond this point, there is supposed to be strong demand also near 1.35, which is able to keep the Euro afloat.

• Traders’ Sentiment

  Right now there is no meaningful difference between the numbers of bullish and bearish market participants, as they take up 46 and 54% respectively. Concerning the orders, 45% are to buy and 55% are to sell the common currency against the Buck.

GBP/USD continues to consolidate

“The U.S. side will probably be USD negative and risk positive.”

- Citigroup based on Bloomberg)

• Pair’s Outlook

  Starting from the beginning of the quarter GBP/USD has been staying inactive, even though there are more ‘buy’ signals than the ‘sell’ ones. On the other hand, none of the important supports, such as the 2009 high at 1.7042, have been broken, meaning the risks are still skewed to the upside. The nearest significant obstacle is the monthly R1 at 1.7248, followed by the monthly R2 together with the rising resistance line at 1.74.

• Traders’ Sentiment

  There are relatively less bears than last Friday, but they are still in an overwhelming majority—70% of the market. As for the orders, there was a significant increase in the percentage of buy ones—from 49% up to 60% over the weekend.

USD/JPY is well-supported by 101

“If Yellen remains dovish, any rally in dollar-yen may be an opportunity to sell it.”

- OzForex (based on Bloomberg)

• Pair’s Outlook

  The currency pair seems to have received a strong bullish impetus after touching the horizontal support at 101 last week. However, it might not be enough to overcome the supply that lies overhead, even though the monthly indicators say it is possible. The nearest resistance is represented by the recently breached trend-line and weekly PP. If the rally is extended, it will encounter the monthly PP and 55-day SMA.

• Traders’ Sentiment

  At the moment three out of four traders prefer to hold long position on the Greenback (70% at the time of the previous report). At the same time the buy orders (64%) also have a noticeable advantage over the sell ones (36%).

USD/CHF marks time

“The theme is really short the dollar, short the euro and a lot of carry, especially in emerging markets and higher-yielding G10.”

- Credit Agricole (based on Reuters)

• Pair’s Outlook

  Although USD/CHF is currently trading above the monthly pivot point and 200-day SMA, we would rather look at the 100-day SMA as the support, since the former is no longer reliable. In case the U.S. Dollar weakens, the dip should stop before the price closes beneath 0.8898/88. From above the movement of the pair is restricted by the 55-day SMA, but there is still a good chance of it re-visiting the key resistance at 0.90.

• Traders’ Sentiment

  The bulls carry on dominating USD/CHF, considering that as many as 71% of open positions are to profit from appreciation of the Dollar. Similarly, there are distinctly more commands to purchase the currency (63%) than to sell it (37%).