Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD comes under 55-day SMA to expose 1.09
“The path of the euro-dollar may be the most visible influence on gold, at least until the Fed meeting.”
- HSBC (based on Bloomberg)
Pair’s Outlook
EUR/USD traded down on Thursday, after the 200-day SMA managed to create a formidable resistance for bullish traders at 1.1031. Yesterday's session resulted in a decline below 55-day SMA, currently at 1.0972. Now we are having a closer look at the 1.09 mark, which is guarded by monthly R1 and 38.2% Fibonacci retracement of an Oct-Nov downtrend. Positive US data later on Friday should result in the testing of this demand. On the other hand, US disappointment rules nothing out, including a spike at least above the 55-day SMA.
Traders’ Sentiment
Bearish market share decreased further from 56% to 55% during the previous trading session. However, majority of pending orders are now set to sell the Euro against US Dollar in both 50/100-pip ranges.
GBP/USD weakens ahead of US data
“The Fed will want to start the ‘normalisation’ process without invoking a strong reaction in currency markets, which would likely see the manufacturing sector suffer disproportionately.”
- ING (based on FXStreet)
Pair’s Outlook
The Cable was a few steps away from touching the major level of 1.51 yesterday, but rebounded from the daily low, with trade closing at 1.5161. Even though the immediate support remained intact, the Greenback is likely to drive the GBP/USD pair lower today, piercing that level and taking another shot at 1.51. However, weekly technical studies were bearish through all five days, suggesting the exchange rate could even drop to 1.50 today. The daily indicators, on the other hand, remain mixed, creating a possibility of another rally today, with the down-trend at 1.5280 getting confirmed.
Traders’ Sentiment
Sentiment shifted to the bullish side, with 52% of all positions now long. Sell orders are now outnumbering the buy ones by 4% points.
USD/JPY makes another effort to erase Wednesday’s gains
“Central banks are all hoping the Fed's imminent tightening will weaken their domestic currencies against the greenback. They're holding back on meeting the market's expectations for further easing.”
- Royal Bank of Scotland (based on Business Recorder)
Pair’s Outlook
The tough resistance cluster prevented the USD/JPY from posting serious gains on Thursday. Although the pair remains under the pressure of the immediate resistance cluster, the set of fundamental data could provide sufficient impetus for the Buck to edge higher. In this case the cluster, represented by the monthly PP and weekly S1 at 122.36, should limit the gains. Nevertheless, the Greenback remains under the risk of falling even deeper, with the closest target to hold the dips resting at 122.99, a breach of which should trigger an even sharper sell-off towards the Nov low at 120.25.
Traders’ Sentiment
Bulls are slowly gaining numbers, as there are only 66% of bearish traders today. The number of sell orders edged up from 58 to 59%.
Gold in wait-and-see mode as US data is looming
“Gold remains locked in a fairly tight range as investors are either sitting on the sidelines or are set in their positions already leading into next week's FOMC meeting.”
- ANZ (based on WBP Online)
Pair’s Outlook
Gold prices tanked below the weekly pivot point on Thursday, even though long traders used an attempt to hold the bullion above this technical level earlier in the morning. While yesterday the July low was not tested well enough, we see it happening Friday morning. US retail sales will be the last important piece of data before the Fed meeting next week, and optimistic numbers should reinforce the market view about rising interest rates. In this situation, gold should feel some uplifted bearish pressure in the next 24 hours, with a possibility to prolong a sell-off down to the weekly S1 at 1,058.
Traders’ Sentiment
The bulls continue keeping higher number of positions than the bears in the SWFX market, namely 62% (63% yesterday) of them.
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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No obvious macro catalysts to steer the bus
The US data calendar remains relatively light, with initial jobless claims and the University of Michigan survey being the key focus. However, these releases may not provide a significant catalyst for the next directional move in the US Dollar.