EUR/USD breached 2015 trend-line

Technical Analysis

EUR/USD breached 2015 trend-line

“It seems that momentum is certainly on the side of being short the euro right now and long the dollar.”

- Chapdelaine & Co (based on Bloomber

• Pair’s Outlook

  EUR/USD prolonged a sell-off below the major upward-sloping 2015 trend-line. On top of that, the monthly S1 at 1.1022 was penetrated as well, but the cross managed to remain above the important psychological level of 1.10. The monthly S2, which is strengthened by the weekly S1, became exposed around the 1.0870 mark. We would allow for this level to limit first attempts to slump even lower. Rallies are likely to be capped by 200-day SMA/weekly PP at 1.1119. The market seems to be refocusing considerably to the downside at the moment.

• Traders’ Sentiment

  The share of SWFX bullish open positions rose from 50% to 51% over the weekend. Meanwhile, pending commands in 100-pip range from the spot are distributed equally between the longs and shorts.

GBP/USD denied by 1.55

“We’ll stay relatively strong in terms of U.K. data.”

- Mizuho Bank Ltd. (based on FXStreet)

• Pair’s Outlook

  Resistance at 1.55, created by the monthly R1 and 100-day SMA, proved to be a major level after the last two weeks of trading. A sell-off from there has already extended beyond the 200-day SMA, and most of the long-term technical indicators keep pointing south. Today we expect to see a lot of pressure on the monthly PP that in turn will be defending September’s low. A breach of 1.53 will highly likely result in a re-test of the 1.51, which is the lowest level since this year’s May.

• Traders’ Sentiment

  Although the percentage of bulls increased, the sentiment remains neutral, as the gap is merely 6 percentage points. Meanwhile, the share of buy orders plunged from 70 to 44%.

USD/JPY gains upward momentum

“As long as the possibility of a BOJ easing remains pervasive, it’s difficult to assume a considerably higher yen.”

- FPG Securities (based on MarketWatch)

• Pair’s Outlook

  Not only did the currency pair manage to close above 120.50, but it also pierced the 200-day SMA last week, meaning we should expect the US Dollar to strengthen even more in the nearest future. The initial resistance is the monthly R1, followed by the 100-day SMA at 122 yen. Additional obstacles for the rally will be the monthly R2 at 122.66 and the rising resistance line at 123, which has been broken to the downside back in August. Meanwhile, we should be wary of the fact that the weekly studies stay bearish.

• Traders’ Sentiment

  There has been a major shift in the attitude of traders towards USD/JPY. The portion of bulls dropped to 51%, while for the past month they had been taking up 70% or more of the market.

Gold unchanged amid lack of strong momentum

“U.S. dollar interest and option strikes at $1,150 should weigh upon gold over the next couple of days.”

- MKS Group (based on CNBC)

• Pair’s Outlook

  Even though the yellow metal's trading range was reaching $20 per ounce on Friday, neither bulls nor bears eventually managed to take control of the market. Gains were being extended above the 200-day SMA and Aug high, but no consolidation took place. The near term outlook is therefore undecided with respect to the bullion. Only a confident spike above 1,173 would refocus our attention back to the north. From the other side, bears are targeting the 1,158/55 zone (20-day SMA/weekly S1), which is followed by even more important demand at 1,147/46 (monthly R1/weekly S2).

• Traders’ Sentiment

  SWFX market sentiment with respect to the precious metal remained broadly unchanged for the past three weeks. During the weekend the share of bulls was flat at 52%, meaning that their advantage still remains very negligible right now.

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