Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD uncertain ahead of ADP employment
“There’s more room for euro depreciation against the yen than the dollar.”
- Societe Generale (based on Bloomberg)
Pair’s Outlook
EUR/USD showed no signs of volatile development on Monday, being that market participants are waiting for major fundamental impetus to come through in course of the second part of this week. The Euro is underpinned by the weekly pivot point at 1.0998, while one of the most important resistances is represented by the 7-month uptrend line at 1.1067. The bearish scenario seems more likely for the moment. Supported by daily technical studies, bears are targeting the 1.09 mark (Oct 28-29 lows) and a success here will expose the next demand area at 1.08.
Traders’ Sentiment
Now the majority of open positions in SWFX market is held by bears (51%). Moreover, the number of long orders in 100-pip range from the spot continued to drop, down from 44% to 39% on a daily basis.
GBP/USD takes another shot at 100-day SMA
“People have come to the realization that the Fed is kind of hell-bent on getting to a liftoff.”
- Societe Generale (based on Reuters)
Pair’s Outlook
The better-than-expected UK Manufacturing PMI was insufficient for the Cable to maintain trade near the 1.55 level yesterday. The pair encountered a rather strong supply at that point, but the exchange rate managed to hold above the 1.54 mark. Although technical indicators retain their bullish signals today, the 100-day SMA is still likely to prevent the Sterling of edging higher, whereas the cluster around 1.5360 keeps providing solid support. Nonetheless, the outlook remains positive, as the 20-day SMA is on the verge of crossing the 55-day one to the upside, suggesting a rally is to occur.
Traders’ Sentiment
There are now only 52% of traders holding long positions (previously 55%), while the portion of buy orders dropped 11% points to 53%.
USD/JPY stuck between 20 and 200-day SMAs
“This payrolls number and the payrolls number next month will be really important in determining the outlook for the dollar.”
- Commonwealth Foreign Exchange (based on MarketWatch)
Pair’s Outlook
The 55-day SMA failed to hold the USD/JPY from a corrective rally yesterday. Nevertheless, the ten-week consolidation trend remains intact, implying that the pair could climb higher towards the 100-day SMA in the medium term. However, the immediate resistance, namely the 200-day SMA, might trigger a Greenback sell-off earlier, causing a slump towards 120.00 major level. A strong impetus is required for the USD to pierce the cluster around this area, which the employment data or Fed Chair’s speech might cause this week.
Traders’ Sentiment
The gap between the bulls and the bears widened from 32 to 42% points, with bears in the majority. There are now also more orders to sell the Buck, taking up 51% of the market (previously 39%).
Gold violates 55/100-day SMAs, sets eye on 1,117
“We remain negative on the overall precious group over the short-term ... The combination of a stronger dollar, soaring U.S. equity markets, ETF liquidation, a jittery Fed, along with a worsening technical picture will all combine to keep the complex on the defensive for a little while longer.”
- INTL FCStone (based on WBP Online)
Pair’s Outlook
As it was expected, the second attempt to penetrate both 55 and 100-day SMAs used to be quite successful. A decline was prolonged down to 1,133 by Monday evening, even though gold has somewhat bounced back on Tuesday. In case bears hold the price below 1,137 through the next 24 hours, we are going to confirm our bearish expectations for the bullion. Main focus is going to switch to the three-month uptrend at 1,117. In the meantime, on the way down both weekly S1 and lower Bollinger band will have to be breached at 1,126 and 1,122, respectively.
Traders’ Sentiment
Yesterday seven percent of all SWFX open positions changed hands from bulls to bears. The portion of longs has therefore dipped from 54% to 47%.
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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