GBP/USD refuses to cross weekly PP

Technical Analysis

EUR/USD stays unchanged below 1.2580

“One number does not change the monetary policy outlook, but the stability in core inflation may help to offset some of the Fed's concerns about declining inflation expectations.”

- JP Morgan (based on Reuters)

• Pair’s Outlook

  On Thursday the EUR/USD currency pair hovered in the range between major level at 1.25 and the closest resistance line, still represented by the weekly R1 at 1.2580. Despite changes in perceptions of daily technical indicators from bearish to bullish, we predict the pair to stay around the current trading level for the remaining part of the week, while from Monday the pair is likely to start losing value and prolong its long-term downward trend.

• Traders’ Sentiment

  Market sentiment on EUR/USD remained fully unchanged in course of last 24 hours, as 50% of all positions are still held both by bulls and bears. Pending orders in both ranges improved and 55% of them are now set to acquire to single currency in 100-pip range.

GBP/USD refuses to cross weekly PP

“Cheaper food and petrol prices are a boon for consumers that should help keep their confidence healthy and return some of the sparkle to U.K. growth next year.”

- Berenberg Bank (based on Bloomberg)

• Pair’s Outlook

  GBP/USD rose in value during last 24 hours; however, the pair refused to breach a resistance at 1.5733 and returned back below the 1.57 major level. It seems that a significant bearish pressure continues to weigh on pair’s performance. Therefore, we forecast the Sterling to decline further in the medium-term, but today it will most probably stay above the monthly S2 at 1.5662. This scenario is supported by technical studies on daily and weekly charts.

• Traders’ Sentiment

  Distribution between bullish and bearish opened positions stays the same for a fourth day in a row at 56% and 44%, respectively. Alongside, pending orders experienced no major changes either, as ones in 100-pip range from the spot are neutral right now.

USD/JPY drops down to monthly R2 at 117.26

“Are our economic policies correct or incorrect? Are there any alternatives? We will clarify these points through this election.”

- Japan’s Prime Minister Shinzo Abe (based on MarketWatch)

• Pair’s Outlook

  The Japanese yen strengthened against the American dollar for the first time since Monday, as comments from Japan’s Finance Minister pushed the USD/JPY cross down. The pair has even surpassed a strong support line around 118 and neared the next one at 117.26. Nevertheless, this move looks like a short-term correction, meaning that the Yen will continue depreciating in the nearest future and may return above the 2007 Oct high during next 24 hours.

• Traders’ Sentiment

  Both market sentiment and pending orders were little changed from yesterday, as bulls continue to hold a majority in both situations. Right now 52% of opened positions are long on US currency, while 72% of orders in 100-pip range are bullish as well.

Demand at 0.9550 holds USD/CHF from slipping further

“The probabilities about when the Fed would move off the zero bound are all piling up on this June meeting.”

- James Bullard, St.Louis Fed President (based on MarketWatch)

• Pair’s Outlook

  USD/CHF’s bears failed to push the cross below 0.9550 for a second consecutive day, being that This demand area is supported by monthly PP, weekly S1, 55-day SMA and a Bollinger band. As still estimated by technical indicators, any downside movement can be expected only in the long-term. At the same time, in the medium-term the mentioned demand zone is likely to push the US dollar to the upside with the weekly R1 at 0.9760 as a potential target line.

• Traders’ Sentiment

  Attitude towards USD/CHF pair remains strongly bullish, as 63% of all positions are long. Meanwhile, 52% and 49% of pending orders are now set to acquire the Greenback in 50 and 100-pip ranges from the current market price.