Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD ready to violate 100/55-day SMAs
“When risk sentiment improves, the euro falls and the Australian dollar rises, it’s a classic case of risk-based pattern.”
- Mizuho Securities (based on Bloomberg)
- Pair’s Outlook
Yesterday EUR/USD failed at the 50% Fibonacci retracement of the Jul-Aug uptrend around 1.1260. The pair therefore slumped down to the 200-day SMA 1.1170, while a decline is continuing on Thursday. Penetration of both 100 and 55-day SMA can be expected, taking into consideration bearish daily technical indicators. Meanwhile, very soon we are going to observe all 55, 100 and 200-day SMA crossing each other. The 55-day SMA is already testing the 100-day SMA to the upside, which implies a change in sentiment towards more positive momentum in overall development of EUR/USD.
Traders’ Sentiment
The share of bulls on the market decreased from 53% to 51%. In the meantime, pending orders in 100-pip range from the spot are still equally divided between bulls and bears.
GBP/USD remains under pressure
“The case for UK monetary policy to tighten regardless of the (Fed's) dithering is as clear as a bell. They won’t rush.”
- Societe Generale (based on Business Recorder)
- Pair’s Outlook
The Sterling struggled to appreciate against the US Dollar for another day, retesting the 23.60% Fibonacci retracement. The pair extended its decline for the fourth consecutive day, but remained rather far from the immediate support level. As no significant area was breached yesterday, the outlook remains bearish, despite other potential market movers being present. The 23.60% Fibo keeps providing resistance, while the Bollinger band is supporting the Pound from below, now bolstered by the weekly S1.
Traders’ Sentiment
Bulls retreated today, as 61% of all positions are now long (previously 63%). At the same time, the number of orders to acquire the Sterling also declined, from 58 to 55%.
USD/JPY makes head against the tide
“While today’s Tankan was not as bad as most had feared, it nonetheless corroborates other signs that Japan’s economic recovery has ground to a halt.”
- Capital Economics (based on WBP Online)
- Pair’s Outlook
The Greenback managed to rebound yesterday, with the upside volatility reaching the weekly PP at 120.33. Even though technical indicators retain their bearish signals, the US Dollar is likely to extend its gains today. However, with the beginning of the new month, the monthly PP shifted to the 119.93 mark, which is providing resistance quite close to the opening price. However, the USD/JPY has already pierced the two immediate resistances and is on the verge of piercing the third one and prolonging its rally, amid rising concerns of further easing from the BoJ.
Traders’ Sentiment
More than two thirds (70%) of traders are now long the Buck, whereas the share of purchase orders declined from 44 to 40%.
Gold closes below 1,115 and shifts attention to 1,100
“Gold prices came under pressure with upbeat U.S. economic data.”
- ANZ (based on CNBC)
- Pair’s Outlook
Gold continued to under-perform on Wednesday, while prolonging the period of daily losses to four consecutive working days. Moreover, the metal closed below both 55-day SMA and 23.6% Fibonacci retracement of the Aug-Sep downtrend, meaning that outlook is deteriorating. We expect the core bearish attention to be focused on the major 1,100 level, which is reinforced by the long term downtrend and lower Bollinger band. Intermediate support is represented by the weekly S2 at 1,105. Despite that, daily studies assume gold is oversold and a rebound is approaching.
Traders’ Sentiment
Distribution between bullish and bearish market participants at the SWFX market has improved substantially in course of the previous trading session. At the moment the former are holding 52% of all open positions, up three percentage points on a daily basis.
This overview can be used only for informational purposes. Dukascopy SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.
Recommended Content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.