Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD fails to overcome weekly PP
“The market consensus is becoming less and less bullish on further ECB action. The other thing is the Fed. Expectations have scaled up a little bit in terms of the number of potential rate hikes for 2016.”
- SEB AB (based on Bloomberg)
Pair’s Outlook
EUR/USD attempted to push itself below the weekly pivot point and monthly R1 around 1.09 on Wednesday. However, the bulls were strong enough in order to avoid a decline under this psychological level. Thursday is expected to be spent in a light trading around the 55-day SMA, currently at 1.0922, even though the market will be fully open throughout the whole day. Trading volumes continued to drop yesterday and reached the lowest level since November 26.
Traders’ Sentiment
The short traders are holding the majority (56%) of all trades, no swing in favour of the either side since yesterday. As for the commands, 51% and 54% of them are set to sell the Euro versus the Greenback in 50 and 100-pip ranges from the current market price, correspondingly.
GBP/USD takes a shot at climbing over the down-trend
“In 2016, the GBP is likely to remain vulnerable most obviously against the USD. The pound in particular should suffer from a mix of fiscal contraction constraining the BOE tightening cycle, making a […] deficit […] more difficult to finance, most especially in the face of ‘Brexit’ uncertainties.”
- Deutsche Bank (based on Pound SterlingLive)
Pair’s Outlook
Although the GBP/USD currency pair appreciated on Wednesday, the immediate resistance in face of the monthly S1 somewhat managed to prevent the price from returning inside the pattern’s borders. Nevertheless, the monthly S1 is providing support today, being the only obstacle holding the Cable from edging lower. Even though a rebound is possible, the chance of downside movement Is higher. Technical studies, which were quite reliable this week, also give bearish signals, suggesting yesterday’s gains could be erased. Meanwhile, the nearest support is located just under the 1.48 level.
Traders’ Sentiment
Bullish market sentiment remains unchanged at 68%, whereas 64% of all orders are to buy the Sterling today (up from 61% yesterday).
USD/JPY extends decline, faces Nov low
“If U.S. data remains broadly in line with the Fed's expectations, we suspect the USD will be off to a positive start in 2016 as there is plenty of scope for rates markets to price in more Fed hikes.”
- BNP Paribas (based on Reuters)
Pair’s Outlook
The US Dollar suffered another loss against the Yen yesterday, due to another set of poor fundamental data. As a result, trade closed under the key support level, which is likely to lead to more USD weakness. The closest spot to limit the losses today is located around 120.20, represented by the Nov low and the Bollinger band, while the monthly S1 is now providing resistance. However, it will be rather difficult for the Buck to recover from intraday losses today, as there are no solid market movers on the Christmas day. Technical studies are also bolstering the possibility of the bearish outcome.
Traders’ Sentiment
With an extra 2% points less 68% of all open positions are now short. Meanwhile, the share of buy orders dropped from 53 to 49%.
Gold is rejected by July low, awaits recovery
“Gold prices will be determined more by trading volume, than any monetary or fundamental development over the holiday period.”
- HSBC (based on CNBC)
Pair’s Outlook
The yellow metal made no confident attempts to violate the July low and 20-day SMA on Wednesday. However, eventually it managed to close under the latter line, but today we expect the bullion's bounce back. All in all, the session is highly likely to be tranquil in terms of volatility, given that trading volumes are cooling down before the Christmas break. Moreover, the sideways trend is forecasted by daily technical indicators for the moment. Thus, the key anchor for gold remains the 20-day SMA at 1,071.
Traders’ Sentiment
The total number of bullish open positions stopped tumbling on Wednesday, as the traders started focusing on the Christmas break and are getting ready for more market movers after holidays. The advantage of the bears amounts to 10% at the moment, as they are keeping 55% of all trades versus 45% for the bulls.
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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