GBP/USD stuck in tight range between 1.54 and 1.55

Technical Analysis

EUR/USD depreciates further

“Greece is heading into the endgame, and a default remains a real possibility. If the euro falls, that should spill over to dollar buying.”

- Mizuho Securities Co. (based on Bloomberg)

• Pair’s Outlook

  Yesterday, EUR/USD managed to consolidate below the monthly PP (1.1003) and is moving further downwards on Tuesday. This event negated the potential upside pressure and market is now likely to focus on the bearish development. Initial demand is currently offered by 55-day SMA, which is placed at 1.0924. The next support is, in turn, located around 1.0850 (weekly S1; Bollinger band), which also guards the long-term target at 1.0740 (monthly S1).

• Traders’ Sentiment

  The gap between long and short positions narrowed since , as bulls are currently keeping 48% of all opened positions. Meanwhile, the commands to buy the Euro against the US Dollar in 100-pip range from the spot dropped by 11% over the past 24 hours to 40%.

GBP/USD stuck in tight range between 1.54 and 1.55

“That [Fed’s September rate hike] leaves the USD bulls marginally with the upper hand; we say marginally because markets are already largely expecting the same and you need something additional to trigger fresh momentum.”

- ANZ (based on Reuters)

• Pair’s Outlook

  The Sterling remained flat against the US Dollar through Monday, despite significant upside volatility. As the pair edged up during the first half of the day, the 20-day SMA, along with the 1.55 psychological area, pushed the Cable back to its opening level. Nevertheless, the British currency is likely to suffer some losses today, with the closest support still being the 200-day SMA around 1.5405. Meanwhile, technical indicators keep showing mixed signs, unable to confirm the outcome.

• Traders’ Sentiment

  Bulls and bears are edging closer to equilibrium, as 48% of traders now hold long positions (previously 46%). There are now more buy commands, as their portion shifted from 49 to 57% of the market.

USD/JPY takes another crack at Dec 2014 high

“It's a dollar-driven market right now, rather than a yen-focused one. Yellen made it clear that the Fed will hike rates and under such conditions the question for participants is what currency to sell.”

- State Street (based on CNBC)

• Pair’s Outlook

  Although the USD/JPY did rise on Monday, gains were not as high as anticipated. The pair remained volatile for some time, but the Bollinger band at 121.77 still prevented it from surging too far. Ultimately, the US Dollar stabilised at 121.65, with expectations of another rally today. Even though technical studies retain mixed signals, the Greenback is likely to appreciate against the Yen and cross the Dec 2014 high, as the Bollinger band shifted above 122 psychological level. Nonetheless, the resistance area remains strong and might push the Buck back eventually.

• Traders’ Sentiment

  The share of bulls dropped from 58 to 57%, whereas the number of buy orders now accounts for 71% of the market (previously 77%).

XAU/USD is unchanged since last Wednesday

“We maintain the view that the third quarter is likely to be the weakest quarter for gold, given that we expect the Fed to start increasing rates in September, but the potential downside is likely to be limited.”

- Barclays (based on CNBC)

• Pair’s Outlook

  For the fifth consecutive day the yellow metal has been remaining broadly unchanged just above the 1,205 mark, even though it has made several attempts to exit from the vicinity of 1,203-1,212 range. The closest supports and resistances are keeping the bullion range bound. XAU/USD needs to consolidate either above 1,213 or below 1,203 to confirm its bullish or bearish intentions, respectively. Meanwhile, daily technical indicators are now sending strongly positive signals to buy gold, but medium and long-term ones are still staying pessimistic on the cross.

• Traders’ Sentiment

  Advantage of bulls over bears at the SWFX market is remaining insignificant, even though the gap between them widened even more during the past 24 hours. The total share of bulls currently stays at 56% versus 44% for bears.