GBP/USD sets new target of 1.58

Technical Analysis

EUR/USD bounced back towards 1.12

“A very short lived move to $1.0960 early Monday has seen the euro rebound strongly suggesting that there is more life in the current rebound off the recent lows than originally thought.”

- Michael Hewson, CMC Markets (based on WBP Online)

• Pair’s Outlook
  

  A considerable drop in the beginning of trading on Monday managed to provide the common currency with a significant bullish momentum afterwards, and EUR/USD faced no issues when returning back above the 1.12 mark. The main daily resistance was offered by the long-term downtrend at 1.1260, reinforced by the weekly PP from below. Volatility of the pair is likely to stay in place in the near-term, and a possible Greek default may send the Euro downwards again with a target around 1.11 (monthly pivot point).

• Traders’ Sentiment

  The share of long open positions at the SWFX market expanded by two additional percentage points in the past 24 hours, up from 45% to 47%.

GBP/USD sets new target of 1.58

“The Fed is concerned because they see these problems in Europe and in the world economy as basically a drag. The current turmoil in Greece may make people around the world even more reluctant to spend.”

- Peterson Institute for International Economics (based on Bloomberg)

• Pair’s Outlook
  

  On Monday, the Sterling appreciated against the US Dollar, but not as much as anticipated. The immediate resistance failed to stop the rally, but the given pair also did not reach the weekly PP at 1.5753, as it stabilised at 1.5727. Technical indicators keep showing bullish signs, although not as strong as yesterday, but still suggesting the Cable is to surge today. The weekly PP now acts as the immediate resistance, but we might even see a hike up to 1.58 if the fundamentals do not disappoint.

• Traders’ Sentiment

  Long and short positions broke out of the equilibrium, as 55% of traders now have a positive outlook towards the Pound.

USD/JPY remains stuck within the borders of 122 and 123

“As pointed out yesterday, 122.00/05 is a major support and this level will unlikely break so easily. However, 123.20 is still a strong resistance and as long as this level is intact, we could see another attempt towards 122.15/20 before a stronger rebound can be expected.”

- UOB Group (based on FX Street)

• Pair’s Outlook
  

  Despite reaching the 123 major level, the USD/JPY remained relatively unchanged on Monday. The pair advanced only eight pips, with risks of falling deeper down. Nevertheless, the Bollinger band and the 55-day SMA keep bolstering the 122 major level, providing strong support, which might cause the US Dollar to bounce back up. From the upside the target remains the same, namely the 123 psychological level, while technical studies retain mixed signals.

• Traders’ Sentiment

  Although not as strong as yesterday, but market sentiment remains bullish at 72% (previously 73%). The share of purchase orders also declined, now taking up only 67% of the market, compared to 78% yesterday.

XAU/USD fluctuates around 1,180

“Gold price could possibly move sharply after the Sunday referendum.”

- Lee Cheong Gold Dealers (based on CNBC)

• Pair’s Outlook
  

  Gold lost value yesterday, following a positive jump in the beginning of the trading day. A new working week opened with a surge above the 2013 low to 1,184, but all gains were erased later in the afternoon. At the same time, the weekly PP and 2013 low have somewhat succeeded in preventing the metal from retreating further. However, on Tuesday XAU/USD decided to move lower, while the closest demand is only offered by the Bollinger band at 1,167. This level is going to be targeted by bears in the short-term, followed by monthly/weekly S1 at 1,162.

• Traders’ Sentiment

  The total share of long open trades at the SWFX market experienced no major changes from yesterday and it still remains solid at 71%, while bears are in the well-pronounced minority with just 29% of all trades.