Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD attempts to bounce off 55-day SMA
“The New Year kicks off with German inflation figures which will be closely watched, as they are a key input into tomorrow’s euro area flash CPI estimate for December.”
- Lloyds Bank (based on Pound Sterling Live)
Pair’s Outlook
Last trading day of 2015 was bearish for the EUR/USD currency pair when it tumbled below the 1.09 mark to settle near 1.0855. During the January 4 Asian session, however, we are seeing a confident recovery around 1.09. This level is reinforced by the weekly pivot point and, if violated, we would allow for gains to be extended through 1.0950 in the nearest future. A longer-term bullish goal is placed at 1.1044 where the 100-day SMA is currently merging with 200-day SMA. From another side, the closest demand is 55-day SMA 1.0864.
Traders’ Sentiment
The bulls are in the minority of 43%, while the bears are holding 57% of all positions at the moment.
GBP/USD puts 1.47 to the test
“I can’t see a way round the tightening US labour market and steady growth delivering more monetary divergence, enough to keep the dollar strongish.”
- Kit Juckes, Societe Generale SA (based on Bloomberg)
Pair’s Outlook
On the last day on 2015 the Cable suffered a rather serious 80-pip decline, with the immediate support failing to hold those losses. Today the pair is under the risk of falling under the psychological level of 1.47, but with the Bollinger band and the weekly S1 providing support around 1.4670. At the same time, the nearest resistance is represented by the weekly PP at 1.4802, whereas the technical studies are unable to confirm either scenario with their mixed signals. A breach of the immediate support is also likely to set GBP/USD on a slippery slope towards the 2015 low of 1.4565.
Traders’ Sentiment
For the fourth time in a row bullish market sentiment remains at 65%, while sell orders are outnumbering the buy ones by 2% points.
USD/JPY begins the year with a 140-pip slump
“Instability in the Middle East might lead to the yen being bought against the dollar, but that might be temporary as higher oil prices would support the economy of the United States, a major oil exporter, in the longer term.”
- BBH (based on Reuters)
Pair’s Outlook
Last week the USD/JPY currency pair retested the 120.00 major level and closed slightly higher—at 120.23. On Monday the USD weakened against the JPY significantly, the demand for which rose after Chinese data disappointed. As a result, the given pair fell to a fresh two-month low, and keeps edging lower towards the Oct 2015 low. The second cluster’s lowest level, namely the monthly S1 at 118.93, has a chance to cause a rebound in the American session; however, the pair is still likely end the day in the red zone, as no impetus today will be strong enough to negate all losses.
Traders’ Sentiment
Bearish traders’ sentiment remains unchanged at 59%, whereas the portion of orders to acquire the US Dollar increased from 57 to 71%.
Gold gains ground on weaker US Dollar
“When you look across the board, there’s just a little bit of geopolitical risk coming back into the market.”
- Ayers Alliance Securities (based on Bloomberg)
Pair’s Outlook
Gold prices have been rising in the morning on January 4, the first working day after a long holiday. Both market volatility and trading volume are highly likely to increase above pre-Christmas levels soon, meaning price movements can become less predictable. In case the US statistics disappoints on Monday, then we should see the bullion consolidating above monthly/weekly PP at 1,065. This fact will therefore expose the 20-day SMA at 1,068, which is followed by the Nov-Dec downtrend at 1,075.
Traders’ Sentiment
Since Thursday of the previous week we have not seen any changes to the SWFX market sentiment with respect to the yellow metal. At the moment around 56% of all traders are still bullish on gold, while 44% of them see the bullion lower.
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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