EUR/USD stays flat

Technical Analysis

EUR/USD stays flat

“We now expect the ECB to cut both the refi and depo rates by 10 basis points next week.”

- BNP Paribas (based on CNBC)

• Pair’s Outlook

  EUR/USD continues to fluctuate within a tight range this week—between 1.32 and 1.3150. And even though the daily and weekly studies are mostly pointing South right now, there is a good chance the currency pair is going to re-visit the resistance at 1.33 before launching an attack on the 2013 Sep low at 1.31. If this support is broken, the Euro will be expected to set course towards 1.2750, which is the last year’s trough.

• Traders’ Sentiment

  The bullish sentiment keeps on strengthening. Already 63% of all positions are long. However, the resources needed for their share to grow are rapidly depleting—only 18% of pending orders are set to purchase the Euro against the Buck.

GBP/USD remain beneath weekly PP

“I would not put the referendum out there as an issue that’s going to break the upward move in the pound. Sterling will get stronger against the euro and yen.”

- Steve Barrow, Standard Bank (based on Bloomberg)

• Pair’s Outlook

  GBP/USD carries on consolidating just below the weekly PP at 1.66 before the sell-off is resumed. However, the Sterling may rise up to the May low at 1.67 prior to a decline. Eventually, the rate is likely to descend down to 1.6250 (2014 low), where the bulls will have an opportunity to regain control of the market. But, according to the monthly technical indicators (five out of eight are bullish), the rally should emerge already next month.

• Traders’ Sentiment

  A substantial majority (65%) of the SWFX market keeps believing that the Pound is already below its fair value and the currency should therefore start gaining ground. Concerning the orders, the amounts of buy (52%) and sell (48%) ones are indistinguishable.

USD/JPY tests monthly R1

“The yen saw buying across the board because of the situation in Ukraine.”

- Sumitomo Mitsui Banking (based on Bloomberg)

• Pair’s Outlook

  The currency pair is currently facing the support at 103.50, which is supposed to prevent further depreciation of the U.S. Dollar and then help it surpass the resistance at 104. But in case this scenario is not realised, USD/JPY will most likely look for support at the July high—103. Still, a key demand area is around the level of 102, where various SMAs merge with the monthly PP and, even more importantly, with the 18-month up-trend.

• Traders’ Sentiment

  There have been no large changes neither in the distribution between the longs (55%) and shorts (45%) nor in the distribution between the buy (41%) and sell (59%) commands since the yesterday’s report.

USD/CHF stands still at 2014 Q1 high

“There are a lot of global events for the markets to digest today.”

- Royal Bank of Scotland (based on MarketWatch)

• Pair’s Outlook

  USD/CHF is presently struggling to gain a foothold above 0.9150, which in turn would allow the pair to target the 2013 Nov 7 high at 0.9250. Judging by the near-term technical indicators, in the end the bulls should overpower the selling pressure. At the same time long-term studies imply the Greenback is going to underperform relative to the Franc, but only a breach of 0.90 to the downside will change the outlook from positive to negative.

• Traders’ Sentiment
  
  Just as 24 hours ago, 57% of the SWFX market participants are currently holding long positions on USD. On the other hand, the percentage of buy orders 50 pips from the spot plunged from 75 down to 59%.