Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD in limbo around 1.1330
“The ECB will certainly keep talking about the prospect as well as readiness and willingness to ease further if necessary. That’s been quite an effective tactic of keeping euro capped.”
- Bank of New Zealand Ltd. (based on Bloomberg)
Pair’s Outlook
Even though daily technical indicators are pointing strongly to the north for now, the price of the Euro against the US currency is unlikely to move noticeably higher in the short term. There is a considerable resistance area located just below the 1.14 mark, created by the weekly pivot point and monthly R1. On the other hand, EUR/USD should be supported by demand at 1.13 (20-day SMA; weekly S1). Our outlook will stay largely neutral, as long as the pair keeps hovering inside this 100-pip technical levels-free zone.
Traders’ Sentiment
The share of bullish open positions increased from 43% to 45% yesterday. Meanwhile, percentage of pending orders to buy the Euro against the US Dollar in 100-pip range from the spot dipped from 53% to 48%.
GBP/USD attempts to break out of its current trading range
“I do see the time to start raising rates in the near future, from my perspective.”
- John Williams, San Francisco Fed President (based on Reuters)
Pair’s Outlook
A correction took place on Monday, pushing the GBP/USD slightly higher. The Cable tested the resistance cluster around 1.55, but failed to pierce it due to lack of momentum. A break of this given cluster is expected to ensure a bullish trend; however, a positive surprise in the US fundamentals is likely to cause a selloff. As a result, the Pound risks falling under the 1.54 major level, with the weekly PP at 1.5380 holding the losses. On the other hand, the given pair has the potential to reach the cluster around 1.5565, but the upper Bollinger band might prevent that from happening.
Traders’ Sentiment
For the second day the share of bulls remains unchanged at 53%, whereas the number of buy orders inched higher from 36 to 53%.
USD/JPY muted around 119.50, awaits a trigger
“We have seen a 50% reduction of USD long holdings this year from speculative funds, largely as a result of tightening financial conditions turning the Federal Reserve more dovish and the market moving to push out its pricing for the first rate hike until May 2016.”
- IG Securities (based on WBP Online)
Pair’s Outlook
Despite having tested the immediate support, the USD/JPY still managed to edge higher yesterday, somewhat strengthened by the improvement in the NAHB Housing Market Index. Nevertheless, technical studies retain their bearish signals in the daily timeframe, insisting the Buck is to sustain losses. The immediate resistance and support clusters remain unchanged, meaning that a significant fundamental event is to drive the exchange rate today. The base case scenario is a decline not lower than the 118.50 area, a ten-month support, now also bolstered by the monthly and weekly S1s.
Traders’ Sentiment
There are more bullish traders today (71%), compared to 70% yesterday, while the ratio of buy and sell orders is now equal to one.
Gold to test reliability of Aug high
“There has been more uncertainty in recent days about the timing of a rate hike, and that is not helping gold.”
- a trader in Sydney (based on CNBC)
Pair’s Outlook
The precious metal continues losing value for a fourth consecutive day on Tuesday. Yesterday the metal dipped below the 200-day SMA, but held above the Aug high at 1,170. Today a violation of the latter level is highly likely, noting prevailing bearish sentiment in the market. A fall below the 1,170 will be expected to cause additional losses in the foreseeable future. The next target area for short traders is placed at 1,155/53, where weekly S1 merges with the 20-day SMA. Meanwhile, extra demand is offered by the monthly R1 at 1,147.
Traders’ Sentiment
The total number of long and short open positions in the SWFX market remained unchanged from Friday of the previous week. The former and the latter are still holding 51% and 49% of all trades, respectively.
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.
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