USD/JPY to enjoy strong demand at 119.00

Technical Analysis

EUR/USD capped by supply at 1.09

“The euro’s rebound is nothing more than adjustments as it remains pressured by lingering uncertainty over Greece and the ECB’s strong easing stance.”

- Mizuho Securities Co. in Tokyo (based on Bloomberg)

• Pair’s Outlook

  After being stopped by the Dec-Mar long-term downtrend line on Thursday, EUR/USD remained under pressure during last day of the week as well. Trading range was rather significant as it reached 150 pips on Friday. However, both opening and closing levels were located close to each other just below the 20-day SMA at 1.0885. At the moment, bearish scenario seems more realistic, taking into account strong supply zone between 1.09 and 1.095 that is unlikely to let bulls succeed in the near term.

• Traders’ Sentiment

  Bullish opened positions at the SWFX market are accounting for 43% this morning, no change over the weekend.

GBP/USD trapped between 1.49 and 1.48

“We're still in a position where our message is... that the next move in interest rates is going to be up.”

- Mark Carney, BoE Governor (based on Reuters)

• Pair’s Outlook

  GBP/USD continues to consolidate. And while previously the currency pair was bound by 1.50 from above and by 1.47 from below, volatility since then has notably subsided. Now the upper and the lower limits are at 1.49 and at 1.48, respectively. Still, the market is bearish (since July 2014), meaning supports are in larger danger than resistances. Accordingly a breach of the monthly S2 will imply extension of losses to 1.47.

• Traders’ Sentiment

  Though there are more bears (54%) than bulls (46%), the difference is too small to claim that the sentiment is negative. Meanwhile, the share of sell orders in the 100-pip range from the spot went noticeably up, namely from 53 to 60%.

USD/JPY to enjoy strong demand at 119.00

“The big policy story about divergence between the U.S. and other economies is still coming through. It’s really just a consolidation phase in the dollar and we should see it continue to strengthen.”

- Commonwealth Bank of Australia (based on Bloomberg)

• Pair’s Outlook

  A recent test of resistance at 122.00 triggered a powerful bearish reaction, but now there is a good chance the bulls will soon regain control of the pair. At the moment USD/JPY is trading near a cluster of supports at 119.00, consisting of the monthly pivot point and 55- and 100-day SMAs. This should be enough to negate the downward pressure and send the exchange rate back to the 2014 high, violation of which will mean an up-move to the 2007 high at 124.00.

• Traders’ Sentiment

  As the US Dollar becomes cheaper, the sentiment towards USD/JPY improves. Right now 70% of open positions are long and only 30% are short. As for the pending orders, 64% are to purchase and 36% are to sell the Greenback against the Yen.

XAU/USD fails to prolong recovery above 1,200

“Yellen's latest comments might just change the course of gold and cause a downward movement in the price from hereon.”

- Phillip Futures (based on CNBC)

• Pair’s Outlook

  Despite still trading above the long-term downtrend line at the moment, XAU/USD continues to show some bearish intentions on Monday, following a first decline in eight days back on Friday. The yellow metal returned below the 1,200 round level and weekly PP at 1,199. Technical indicators suggest the cross will plunge even further in the medium and long-term. However, daily studies are strongly positive right now, meaning that the bullion's short-term revival is not completely off the table.

• Traders’ Sentiment

  Sentiment towards the precious metal is optimistic among SWFX traders as the total share of bullish positions (64%) has a strong advantage over the bearish ones at the moment.