Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD is flat at 1.0930 before NY holidays
“Some short euro positions are still being squared in the marketplace.”
- Macquarie Ltd (based on Reuters)
Pair’s Outlook
Disappointing fundamental reports from both Europe and US resulted in no change for the EUR/USD currency pair on Wednesday. It kept hovering around the weekly pivot point at 1.0930. Besides this technical level, there is a vital demand area below the spot at 1.09. It is created by 55/20-day SMAs, weekly S1 and monthly R1 support lines, meaning any sell-off will not be an easy task for the Euro. A rally, in turn, can be extended through 1.10 in the mid-term where both the upper Bollinger band and weekly R1 lie.
Traders’ Sentiment
The bears continue outperforming bulls in terms of open positions by a margin of 57% to 43%. However, for now only 29% and 36% (35% and 43% yesterday) of the commands are set to acquire the Euro in 50 and 100-pip ranges from the spot, respectively.
GBP/USD under the risk of falling 1.48
“Since the UK will hold a referendum of Brexit and low inflation may prompt the BoE to defer its first rate hike to Q2 2017, Citi analysts revised down GBP/USD 0-3 month forecast from 1.50 to 1.49.”
- Citibank (based on ExchangeRates.org.uk)
Pair’s Outlook
Due to poor US fundamental results on Wednesday, the GBP/USD currency pair recovered from intraday lows and ended the day relatively flat. Technical studies continue to give bearish signals today, suggesting the pair is likely to extend its declined and fall under 1.48. Furthermore, the weekly and monthly S1s are still providing resistance around 1.4860, leaving little space for a rally to take place. Immediate support is located at 1.4759 in face of the weekly S2, but another set of fundamental data could cause a rebound towards the 1.4860 resistance cluster.
Traders’ Sentiment
For the third consecutive day the share of bulls takes up 65% of the market, whereas the share of buy orders edged up from 53 to 54%.
USD/JPY retests the weekly PP
“The Fed story will continue and push the dollar higher against the yen.”
- ABN Amro Group NV (based on Bloomberg)
Pair’s Outlook
The USD/JPY managed to appreciate for the third day in a row yesterday, with the weekly PP preventing the pair from further gains. Even though a decline failed to occur on Wednesday, technical indicators insist the Greenback is to weaken against the Japanese Yen today. The weekly PP is reinforcing that view, as it prevented the Greenback from climbing higher through most of the week. The nearest support is represented by the up-trend, the Bollinger band and the weekly S1 around 119.50, but trade is likely to close above the major level of 120.00.
Traders’ Sentiment
Bearish traders’ sentiment remains unchanged at 59%, while the number of purchase orders lost four points down to a total of 57%.
Gold pierced through weekly S1 to park near 1,060
“Next year too gold will be lower as U.S. interest rates will keep going higher.”
- a bullion trader in Hong Kong (based on CNBC)
Pair’s Outlook
Gold traded downwards on Wednesday, as declining commodities across the board failed to keep the yellow metal any near the green territory. US Dollar rallied, while gold prices dipped down to the 1,060 mark. After it received some bearish support from the 20-day SMA, the metal decided to ignore the weekly S1 and went through this technical level with ease. Now the focus is shifting to the weekly S2, which is reinforced by the lower Bollinger band at 1,055/54. Here we can observe some buoyancy for gold, but the mid-term outlook still remains largely negative.
Traders’ Sentiment
Following a relatively heavy gold price plunge in the past 24 hours, some traders changed hands and closed their bearish positions to expect a rebound today. Now around 56% of all SWFX market participants are holding long positions, up from 54% yesterday.
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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