EUR/USD puts pressure on 1.3350

Technical Analysis

EUR/USD puts pressure on 1.3350

“The trajectory [for the Euro] is still downwards.”

- Bank of Singapore (based on CNBC)

• Pair’s Outlook

  EUR/USD is currently eroding the weekly S1 at 1.3350, a breach of which is expected to lead to a test of the 2013 Q4 low at 1.33. If the bears continue pushing the price South even then, despite the monthly indicators being against a rise of the price, the sell-off may extend through the monthly pivots towards the 2013 Sep low at 1.31. In the meantime, any rallies should be stopped at 1.35, where the down-trend merges with the monthly PP and 55-day SMA.

• Traders’ Sentiment

  Just like there is no significant difference between the numbers of long (54%) and short (46%) positions, the gap between the commands placed to buy (46%) and to sell (54%) is also negligible at the moment.

GBP/USD receives support from 200-day SMA

“The market may have got a little ahead of itself in pricing in BoE rate hikes.”

- Rabobank (based on Reuters)

• Pair’s Outlook

  After the Cable approached the 200-day SMA, the currency pair received a strong impetus and covered a portion of the losses made last Friday. Right now the Sterling is facing the weekly PP at 1.6810. If this resistance is broken, there will be room for a larger bullish correction, possibly to the 100-day SMA just above 1.69. Though the bias will remain to the downside as long as the 2009 high at 1.7050 stays intact.

• Traders’ Sentiment

  Most of the SWFX market participants expect the Sterling to outperform the U.S. Dollar, being that 59% of open positions are long. Meanwhile, the share of buy orders 50 pips from the spot noticeably declined, from 79 to 51%.

USD/JPY’s recovery remains brittle

“The BOJ is likely to be forced to support the economy in the latter half of the year. The yen is likely to come under selling pressure.”

- Money Square Japan (based on Bloomberg)

• Pair’s Outlook

  Although the U.S. Dollar is not as lively as expected after diving to 101.53, the currency is nevertheless grinding higher. Still, there is a number of resistances that must be overcome, such as the monthly PP and 200-day SMA. USD/JPY will then have a good opportunity to build on the success and reach the 2014 Q2 high at 104. For the time being the daily and monthly technical studies are supporting this course of events.

• Traders’ Sentiment

  The SWFX traders remain net buyers of the U.S. Dollar against the Yen—73% of open positions are currently long. At the same time the percentage of buy orders set 50 pips from the spot price went up from 38 to 54%.

USD/CHF continues to struggle with 0.91

“The SNB is giving the impression that it’s happy with 1.20 francs per euro, and it’s not going to move anymore, and that’s bad.”

- Swatch Group (based on Bloomberg)

• Pair’s Outlook

  Yesterday’s attempt to break 0.91 did not turn out to be successful. Accordingly, USD/CHF keeps trading under the weekly R1 level. The pair nonetheless has the potential to rise and challenge this year’s highest point, namely 0.9156. The bullish outlook is based on the premise of two dense demand areas supporting the price, specifically around 0.90 (up-trend, monthly PP and 55-day SMA) and around 0.8950 (monthly S1 together with 100 and 200-day SMAs).

• Traders’ Sentiment

  While there is still no change in the distribution between the bulls (72%) and bears (28%) in the market, right now there are relatively a lot more buy orders than yesterday, as their share 50 pips around the spot jumped from 47 to 74%.