EUR/USD's bulls find momentum at weekly PP

Technical Analysis

EUR/USD's bulls find momentum at weekly PP

“We’re having a slight relief rally in the euro. Even hearing some kind of optimism is supporting the currency.”

- Standard Chartered Plc (based on Bloomberg)

• Pair’s Outlook

  EUR/USD has eroded two important resistance lines on Thursday, by surging considerably above 1.08. As a result, it seems that strong bullish impetus was created by weekly PP at 1.0724, which allowed pair to gain about 100 pips yesterday. However, there are important supply zones ahead of the price. They include last week's high at 1.0848 and 55-day SMA at 1.0945. Only closure above the latter level, however, is likely to change the near-term forecast to bullish.

• Traders’ Sentiment

  The total number of bullish opened positions at the SWFX market jumped unexpectedly by six percentage points from yesterday and surpassed the 50% mark to reach 55% in the morning on Friday.

GBP/USD keeps climbing up

“Still the 1.5000 barrier has proven to be a formidable resistance over the past month and with UK election still a big unknown further upside in the pair may be limited.”

- BK Asset Management (based on PoundSterling Live)

• Pair’s Outlook

  Yesterday, the Cable slightly underperformed, as it was unable to reach the initial resistance level. Moreover, downside volatility stretched out towards 1.4950, rather than 1.50. At the end of the day GBP/USD closed at 1.5051. Today’s perspective towards the Sterling is bullish. A surge is likely to occur amid soft fundamental data from the US, which showed worse-than-expected figures in the previous five months. The resistance cluster shifted slightly higher to 1.5105. Meanwhile, technical studies retain their mixed signals.

• Traders’ Sentiment

  More traders are now long the British currency, namely 42% of them (previously 41%). The gap between buy and sell commands narrowed to 45% vs 55%.

USD/JPY struggles to stay around 119.5

“Despite the softer data, we think the market is going to remain focused on risks of a more hawkish Fed message next week, and risks to U.S. front-end yields remain skewed to the upside from current low levels.”

- BNP Paribas (based on CNBC)

• Pair’s Outlook

  The USD/JPY currency pair behaved almost in accordance with expectations. The Greenback plunged, but not as far as predicted, although the weekly PP was touched during the trading hours. Ultimately, the Buck stabilised just under the 20-day SMA, which should not have had sufficient strength to do so. Technical indicators are bearish, suggesting a further decline today. The weekly PP now acts as the closest support; however, a fall towards 119.25, namely the 100-day SMA, is the prospect for today.

  Traders’ Sentiment

  Market sentiment strengthened, with the share of longs adding two percentage points up to 74%. At the same time, the buy and the sell order ratio is equal to one.

XAU/USD recovers towards 55-day SMA

“Despite the softer data, we think the market is going to remain focused on risks of a more hawkish Fed message next week, and risks to U.S. front-end yields remain skewed to the upside from current low levels.”

- BNP Paribas (based on Reuters)

• Pair’s Outlook

  On Thursday, the bullion rebounded marginally after a significant slump that took place a day before, on Wednesday. By getting support from weekly S1, bulls decided to act and pushed Gold towards 55/20-day SMAs at 1,195. Nevertheless, the short-term outlook for the yellow metal remains bearish. Moreover, as the gap between 55 and 200-day SMAs is widening, it points on a strengthening pace of a drop. However, for the negative scenario to be confirmed in medium-term, the bullion should retreat below 2013 low at 1,180.

• Traders’ Sentiment

  Bulls have a substantial advantage over bears at the SWFX market, as they are holding 74% of all opened trades in the morning on Friday, up one percentage point during past 24 hours.