EUR/USD plunges to reach weekly S1

Technical Analysis

EUR/USD plunges to reach weekly S1

“The statement was a bit clumsy, while I thought Yellen was very clear.”

- TD Securities (based on Bloomberg)

• Pair’s Outlook

  On Wednesday, the EUR/USD experienced notable changes during the trading session, especially following hawkish news from the Fed on future interest rates. The currency pair momentarily dropped down to the monthly S1 at 1.2339, while on Thursday's morning a decline continued and the Euro is already trading below 1.23 versus the Greenback. Even though technicals are neutral on a daily chart, we expect the pair to reach 2014 low at 1.2246 quite soon.

• Traders’ Sentiment

  The gap between long and short positions returned back to the level seen on Monday, as at the moment there are 46% of long and 54% of short positions, while 67% of pending orders in 100-pip range are now set to acquire the Euro versus the Buck.

GBP/USD hovers around this year's low

“Based on its current assessment, the committee judges that it can be patient in beginning to normalize the stance of monetary policy.”

- Federal Reserve (based on Reuters)

• Pair’s Outlook

  GBP/USD has plummeted below the weekly S1 at 1.5586 and is hovering around this year's lows. Moreover, the risk of the pair falling even lower is increasing, despite the daily and monthly technicals being to the upside. To our mind, a dip below this year's low at 1.5542 could provoke a sell-off towards the monthly S1 at 1.5484.

• Traders’ Sentiment

  As the Pound became cheaper, the number of people believing it is under-priced relative to the US currency has increased, namely from 51% to 55%. Concerning the orders, 58% of them are set to sell the Sterling against the Greenback.

USD/JPY climbs closer to 119

“They were worried that if they dropped ‘considerable time’ that markets would think rate hikes were imminent. What they are doing here is slow-playing the transition.”

- Barclays (based on Bloomberg)

• Pair’s Outlook

  The cross received a bullish impetus around the weekly S1 at 116.91 that let the pair to touch the 119 level. Currently, USD/JPY is fluctuating slightly below the weekly PP at 119.38; although, if the pair keeps its pace then it will be breached. The target remains to be the psychological level at 120; however, the lack of bullishness in technical indicators is limiting the bullish potential.

• Traders’ Sentiment

  The sentiment of the SWFX market participants have not changed since the last time of writing and it remains neutral with respect to USD/JPY - 52% of the market participants are long. At the same time the amount of the buy orders has increased substantially - reaching 79%.

Gold trading just below $1,200

“The FOMC statement was deemed by gold market traders to be slightly bullish, judging from the modest gains seen right after the statement was released.”

- Kitco (based on MarketWatch)

• Pair’s Outlook

  On Tuesday, the price of Gold was very volatile. During some points of time the bullion managed to climb even above the weekly pivot point, which is located at $1,215. However, fundamental factors pushed it back to trade lower, which resulted in the closure just above the weekly S1 at $1,197. As daily technical studies support the sideways movement, we would suggest Gold to hover around $1,200 in the nearest future.

• Traders’ Sentiment
  Distribution between opened positions for buying or selling Gold is staying almost unchanged for a third consecutive day. At the moment 75% of SWFX market participants are betting on the upside movement.