USD/JPY takes another crack at 123

Technical Analysis

EUR/USD fully unchanged at 1.12

“The ECB continuing to be aggressive through to September will continue to pressure the euro lower. Policy differentials, rate differentials with the U.S. and growth differentials all point to a lower euro.”

- Barclays (based on Bloomberg)

• Pair’s Outlook

  Changes of the EUR/USD currency pair amounted to zero on Thursday, as it rejected to move in any direction amid mixed factors that could drive the cross. From the technical point of view, the rate lies just below the 20-day SMA and weekly S1 at 1.12, which are reinforced by the long-term downtrend around 1.1260. Therefore, there is little chance of a rebound, even though five out of eight daily technical indicators are giving signals to acquire the Euro.

• Traders’ Sentiment

  The share of long open positions at the SWFX market has been stable in the past 24 hours at 44%. Meanwhile, the portion of pending orders to buy the Euro in 100-pip range from spot lost two additional percentage points yesterday, down from 42% to 40%.

GBP/USD to attempt to reclaim 1.58

“This week we have seen appetite to start rebuilding dollar long positions. Markets are feeling more confident that US data is rebounding and the dollar will do well.”

- BNP Paribas (based on WBP Online)

• Pair’s Outlook

  The monthly R1 managed to cause the Cable to rebound on Thursday. Gains, however, were limited by the 1.5750 level, just a few pips away from the weekly PP. Nevertheless, the bullish perspective towards the Sterling remains strong, as technical indicators are giving distinctly bullish signals. The immediate resistance is likely to be breached, and the Pound might even stabilse above the 1.58 major level.

• Traders’ Sentiment

  Market sentiment remains unchanged, with bears still taking up 51% of the market. The portion of orders to acquire the British currency, however, increased from 45 to 56%.

USD/JPY takes another crack at 123

“The Japanese Yen is being supported by falling equities and market's uncertainty that pushes investors towards safe-havens.”

- Valeria Bednarik, FX Street (based on FX Street)

• Pair’s Outlook

  The USD/JPY did fall yesterday, but not as much as anticipated. The pair failed to reach the support at 123.23 and closed trade even higher at 123.59. However, the Greenback is expected to fall under more pressure today, while technical studies are showing mixed signs. The target remains the 123.23 level, namely the weekly PP, a decline to 123 psychological level is also possible if the US fundamentals disappoint.

• Traders’ Sentiment

  Bulls keep gaining ground, as 63% of positions are long today, compared to 62% yesterday. The number of buy commands remained unchanged at 65%.

XAU/USD decreases its pace of drop

“Despite the possible gold-bullish ramifications of a Greek default, gold prices did little, indicating investors are not yet focused on gold as a safe haven as regards the Greek crisis.”

- HSBC (based on CNBC)

• Pair’s Outlook

  The bullion is using the opportunity to decline in value, provided with broad free space down to the monthly S1 at 1,162. As a result, the metal has already been slumping for a fourth consecutive day, while a confident recovery is unlikely in the short term. Gold seems to have consolidated below the 2013 low/weekly S1 (1,180), making the idea of growth even more difficult to implement. Nonetheless, the probability of slight upside changes still exists, especially considering a strong buy signal from the technical studies.

• Traders’ Sentiment

  The total share of long open trades at the SWFX market remains solid at 71%, while bears are in the well-pronounced minority with just 29% of all trades. Bullish sentiment on the market gained one extra percentage point in the past 24 hours.