EUR/USD takes a break at 1.0930

Technical Analysis

EUR/USD takes a break at 1.0930

“The U.S. dollar remains supported by the looming Fed tightening cycle.”

- Westpac Banking Corp. (based on Bloomberg)

• Pair’s Outlook

  Bears failed to push though the weekly PP yesterday, but this does not change the bearish outlook on the Euro. The ceiling is still at 1.11, while the July low at 1.0810 is the target, meaning any rallies will be of a correctional nature The negative bias is reinforced by the daily and monthly technicals. Even if the resistance trend-line is broken, the bears will have a good opportunity to recuperate at 1.1240 with the help of the 200-day SMA.

• Traders’ Sentiment

  At the moment the sentiment among the SWFX traders is neutral: 49% of open positions are long and the remaining 51% are short. As for the orders, 60% of them are to sell the single currency, at a notable distance from 30% recorded yesterday.

GBP/USD hovers above 1.56

“The U.S. GDP was mixed but on the whole it underpins the case for a rate hike. The market will continue to search for more hints on whether it will come in September or later.”

- Barclays (based on CNBC)

• Pair’s Outlook

  The GBP/USD currency pair experienced some volatility yesterday, amid mixed US fundamental data. As a result, the Cable remained relatively unchanged, as the Sterling added only four pips against the Greenback. Furthermore, the weekly PP prevented the pair from edging lower by the end of the month and is likely to do so again today, in spite of mixed technical indicators. Trade is expected to close above the 1.56 level and possibly at 1.5638, namely the weekly R1, if the US fundamentals disappoint.

• Traders’ Sentiment

  Bulls keep pushing forward, as there are now 49% of traders with a positive outlook towards the Sterling. The share of buy orders added ten percentage points. The orders now take up 54% of the market.

USD/JPY attempts to preserve the bullish trend

“The trend of [US] dollar strength will probably continue heading into the U.S. jobs data next week.”

- Sumitomo Mitsui Banking Corporation (based on Reuters)

• Pair’s Outlook

  The US Dollar reached a daily high of 124.60 against the Yen yesterday, but was instantly pushed back down, where it stabilised at 124.07. Although the gains were not as large as anticipated, the 124.00 major level was still retaken. Technical indicators retain their bullish signals today, suggesting the Greenback is to extend its rally. Even though the weekly R1 resistance could be reached today, the Buck could still suffer losses and declined towards 123.63. Furthermore, the weekly PP might also play its part and provide sufficient support, causing the USD/JPY to inch higher by day’s end.

• Traders’ Sentiment

  Bullish traders’ sentiment remains unchanged at 74% for the third day, whereas 69% of all orders are to buy the Buck (up from 64%).

XAU/USD gains bearish momentum

“Despite trading at multi-year lows, physical demand has been on the low side with premiums in China and India hardly moving.”

- MKS Group (based on CNBC)

• Pair’s Outlook

  XAU/USD is under heavy selling pressure at the moment, which should be enough to take the price down to the 2010 low eventually. Once the July 20 and 24 lows are surpassed, there will be no significant barriers to test 1,045, although it should be noted that on Monday we will have new weekly and monthly pivot points. Beyond the 2010 low lies the 2008 high at 1,032. In case of an alternative course of events, namely violation of 1,104/00, this will expose the 2014 low at 1,132. Meanwhile, the technical indicators are mixed, meaning expected depreciation of gold to the target levels may take some time.

• Traders’ Sentiment

  Traders started to take advantage of falling gold prices. The share of long positions has increased by three percentage points to 73% since the previous report.