EUR/USD fails to violate Bollinger band for second day

Technical Analysis

EUR/USD fails to violate Bollinger band for second day

“The dollar has been trading on the stronger side. I’m looking for confirmation that the economy was getting better toward the end of the first quarter. The market is anticipating good figures.”

- strategist at Mizuho Bank Ltd. (based on Bloomberg)

• Pair’s Outlook

  Despite falling for a sixth day in a row, the Euro failed to drop beyond Bollinger band at 1.0550 on Monday. Meanwhile, it was a second attempt to breach this support. Overall, EUR/USD went marginally to the south during past 24 hours and remained range bound between 1.055 and 1.06. Technical indicators are completely unchanged from Monday, with daily studies being mixed and weekly ones sending bearish signals. In case the pair crosses 1.05 on Tuesday, it is going to target the weekly S1 at 1.0434 next.

• Traders’ Sentiment

  Distribution between bulls and bears at the SWFX market is the most positive in more than three months, as longs are currently holding 56% of all opened positions, up 2% during past 24 hours.

GBP/USD experiences a setback

“The UK will release several inflation-related figures on Tuesday, expected overall weak, which therefore should prevent the British Pound from advancing further.”

- (based on FX Street)

• Pair’s Outlook

  The Sterling keeps surprising, as it edged up on Monday, instead of slumping versus the US Dollar. Even though there were in fact fluctuations to the downside, the Cable still added 31 pips, but was unable to erase Friday’s losses. Moreover, the 1.47 area was not reclaimed, and the pair is likely to retreat further away from this level today. The technical studies remain mixed, but a fall at least to 1.46 is a high possibility amid the fear of deflation in the UK.

• Traders’ Sentiment

  SWFX traders’ outlook towards the Pound worsened again, with long positions now taking only 42% of the market (previously 43%). The number of buy orders decreased as well, now they account for 46% of all commands.

USD/JPY to negate some losses

“U.S. retail sales will be critical for currencies. Given the recent negative trend, markets would react poorly if the 1.1 percent increase expected is missed.”

- ANZ (based on CNBC)

• Pair’s Outlook

  USD/JPY demonstrated increasing levels of volatility yesterday, with the difference between the open and close exceeding 100 pips. The US Dollar rose during the first half of the day, but in the end it closed lower, just above 120 yen. As for Tuesday, the Buck is expected to rebound, while the nearest significant resistance lies at 120.64, namely the upper Bollinger band. Meanwhile, the technical indicators are still giving mixed signals.

• Traders’ Sentiment

  Although not as strong as yesterday, but the market sentiment among SWFX traders remains bullish. Today 70% of all positions are long. At the same time, the gap between the buy and sell orders narrowed to 54% vs 56%.

XAU/USD is range bound between 1,206 and 1,196

“The cycle of the strong U.S. dollar has not ended. We are not very bullish about gold's price performance this year.”

- Industrial Bank in Shanghai (based on Reuters)

• Pair’s Outlook

  Even though trading range of XAU/USD remained under pressure between to technical lines on Monday, Gold still managed to stay within its boundaries during the day. Following a jump up to the 55-day SMA on Friday, this level pushed the bullion back towards the 20-day SMA yesterday, where the metal closed trading session just below 1,200. Currently, there are two dense areas around present market price of Gold. In case it falls below 1,191, then we should observe a sell-off down to 1,180 (2013 low) in the near-term. Otherwise, a climb above 1,211 will provide bulls with momentum to send the precious metal as high as 1,223 (monthly R1).

• Traders’ Sentiment

  Bulls have a substantial advantage over bears at the SWFX market, as the former ones are holding 72% of all opened trades in the morning on Tuesday, down one percentage point during past 24 hours of trading.