GBP/USD to step back

Technical Analysis

EUR/USD gains 80 pips to reach 1.0650

“It’s not just that the euro is falling; faith in the currency seems to be crumbling.”

- Standard Bank Group Plc. (based on Bloomberg)

• Pair’s Outlook

  After a third unsuccessful attempt to breach the lower Bollinger band at 1.0550, pair decided to change direction of its development and turned attention to the closest resistance at 1.0735. However, considering a 200-pip gap until that mark, EUR/USD managed to advance just up to 1.0650 on Tuesday. Judging from technical indicators, which are still fairly bearish on all time-frames, the yesterday's rebound was temporary and Euro should resume falling in the near-term, with medium-term target at 2015 low (1.0461).

• Traders’ Sentiment

  The total number of bullish opened positions at the SWFX market remains positive at 54% in the morning on Wednesday, down two percentage points during past 24 hours.

GBP/USD to step back

“Given the daily Hammer pattern formed yesterday after the market rejected the levels below 1.46 and the above mentioned signals from the weekly chart, I believe there is a good chance of the 1.46 support level seeing a base in Cable with further recovery on the table.”

- RBS (based on FX Street)

• Pair’s Outlook

  The Sterling surprised with its performance against the US Dollar, as the price surged more than 100 pips. The Cable dropped below 1.46 first, but did not stay beneath the round level for long. Ultimately, GBP/USD breached the barrier at 1.47, as the weekly PP was unable to stop Pound’s appreciation. Today, as suggested by the technical studies, we expect a bearish correction, and there is a high chance of a sell-off back to 1.47. Additional support is represented by the Bollinger band at 1.4640.

• Traders’ Sentiment

  Both net positions and net orders remain unchanged. Right now 42% of the traders retain a positive outlook towards the Sterling, while 54% of commands placed 100 pips from the spot “sell” ones.

USD/JPY falls deeper

“The U.S. data over the rest of this week will become increasingly important, further misses will likely drive more sustained losses for the USD.”

- ANZ (based on CNBC)

• Pair’s Outlook

  On Tuesday, the USD/JPY pair failed to rebound and dropped amid the worse-than-expected fundamentals. The Greenback reached out to the weekly S1 at 119.10, but eventually closed at 119.44. The Buck is likely to extend its slide, while the technical indicators are still giving mixed signals. The target is 119 yen, although the US Dollar might also reach the lower Bollinger band around 118.77.

• Traders’ Sentiment

  Market sentiment improved further, and the long positions returned to their Monday’s level of 74%. The number of buy orders, on the other hand, retreated, as 41% of commands are to acquire the Greenback and the remaining 59% are to sell.

XAU/USD attempts to penetrate weekly S1

“The gold market is quite subdued at this time. There's no clear direction. I think we need a clearer catalyst down the road and that will come in the form of the FOMC meeting in two weeks' time.”

- Phillip Futures (based on CNBC)

• Pair’s Outlook

  Yesterday, XAU/USD escaped the narrow range, in which the cross was bounded for the past two trading days. This violation took place to the downside and the bullion breached both 20-day SMA and weekly S1 at 1,195 and 1,191, respectively. At the same time, the next demand area at 1,183 (monthly PP) sent the yellow metal back above 1,190. Nonetheless, this move is showing bearish intentions of Gold for the medium-term, while weekly and monthly technical indicators suggest the bearish scenario is inevitable. However, on a daily basis we may observe attempts to trade higher around 1,200.

• Traders’ Sentiment

  Bulls have a substantial advantage over bears at the SWFX market, as the former ones are holding 71% of all opened trades in the morning on Wednesday, down one more percentage point during past 24 hours of trading.