GBP/USD attempts to negate weekly losses

Technical Analysis

EUR/USD fails to return back above 100-day SMA

“Speculation about the timing of when rates will be raised may have been pushed back, but the dollar is being bought and it’s on an uptrend. The euro is clearly overvalued. Even with the drop in European yields, the currency hasn’t adjusted.”

- Brown Brothers Harriman & Co. (based on Bloomberg)

• Pair’s Outlook

  Despite EUR/USD's attempts to return back above the 100-day SMA at 1.1147, the key attention remains on the downside and the closest support level at 1.1013 (weekly S2). This demand is accompanied by the monthly pivot point at 1.1003, and only a closure below both of them will refocus the market on even lower levels. Monthly technical indicators still remain bearish, putting the long-term target on the 1.09 area (200-day SMA).

• Traders’ Sentiment

  The gap between long and short positions remains biased in favour of the latter, as bulls are currently keeping only 47% of all opened positions. Commands to buy the Euro against the US Dollar in 100-pip range from the spot dropped by 5% to 37%.

GBP/USD attempts to negate weekly losses

“Today I will start discussions in earnest with fellow leaders on reforming the EU and renegotiating the UK's relationship with it.”

- David Cameron, UK Prime Minister (based on Reuters)

• Pair’s Outlook

  The Sterling appreciated against the US Dollar for the second day yesterday. The British currency almost managed to erase Tuesday’s losses, with the session high even stretching out to 1.57. However, the weekly PP limited the rally and forced the pair to settle at 1.5655. The Cable is likely to edge up again today, with the monthly R1 acting as the closest resistance at 1.5712. Nonetheless, a surge to 1.58 is also possible if the US fundamentals show weak figures. Technical indicators remain bullish, bolstering the positive outcome.

• Traders’ Sentiment

  The share of bulls remained unchanged, still 45% of traders are long the Pound, whereas the portion of purchase orders increased from 56 to 69%.

USD/JPY falls beneath 121

“The (recent) stagnation of dollar/yen has hidden an underlying weak yen trend.”

- Standard Chartered (based on CNBC)

• Pair’s Outlook

  On Thursday, the US Dollar suffered losses, amid worse-than-expected fundamentals. However, the Bollinger band at 121.04 managed to stop the USD/JPY pair from falling too deep. Further weakness is expected today, and the Greenback is not just likely to fall under 121 area again, but even pierce the two closest supports, while trade should close around 120.50. Meanwhile, technical studies retain mixed signals, unable to confirm the scenario.

• Traders’ Sentiment

  Bullish market sentiment returned to its Wednesday’s level of 60% (previously 58%). The number of buy orders added four percentage points. The commands now account for 69% of the market.

XAU/USD is unchanged below weekly PP

“Gold will benefit from the Fed's decision to postpone its rate hike and the bar for gold's support level looks to be raised from here.”

- Phillip Futures (based on WBP Online)

• Pair’s Outlook

  Yesterday, the bullion registered no substantial price movements. The key resistance zone remains in place around 1,210. This cluster of supply levels is represented by 100 and 200-day SMAs, weekly PP and monthly R1. The near-term outlook will stay bearish, unless Gold penetrates all of the mentioned resistances, which seems to be possible from the point of view of strongly positive daily technical indicators. Nevertheless, bears are currently focusing on driving the XAU/USD cross down to the monthly PP at 1,194.

• Traders’ Sentiment

  Advantage of bulls over bears at the SWFX market is remaining extremely small, while the gap between them amounts to just four percentage points at the moment. The total share of bulls stays at 52% versus 48% for bears.