Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD tumbled to settle near 1.0830
“Looking ahead, it should take at least until the second half of the year before German headline inflation at least crosses the 1%-threshold again.”
- ING (based on WBP Online)
Pair’s Outlook
EUR/USD posted minor losses during the first trading day of 2016, even though daily highs and lows ranged from 1.0950 to 1.0780. Weak US production data limited that Euro's decline on Monday, and the pair managed to close above the crucial support represented by the monthly pivot point and July 2015 low. Focus remains on the downside, as it seems that EUR/USD is building another bearish channel in the daily chart. However, inability to violate the 1.08 demand for a second time could result in purchases of the pair and an advance in the direction of the weekly pivot point at 1.09.
Traders’ Sentiment
The SWFX bulls are still remaining in the minority of 43%, while the bears are holding 57% of all positions at the moment.
GBP/USD in tight range between 1.4650 and 1.48
“Global weakness could throw a wrench against another U.S. rate hike.”
- Western Union Business Solutions (based on Business Recorder)
Pair’s Outlook
Cable’s volatility yesterday was limited by the immediate support and resistance, while the GBP/USD ended the day relatively unchanged with a slight move to the downside. Even though the pair remains in a bearish trend, a corrective rally might occur today, without the violation of the resistance in face of the weekly PP. Technical indicators, however, keep giving mixed signals in the daily timeframe, unable to support the positive outlook, suggesting a decline towards the weekly S1 and the Bollinger band around 1.4655 is possible.
Traders’ Sentiment
Today 51% of all open positions are long, compared to 65% yesterday. The percentage of buy orders increased from 49 to 63%.
USD/JPY anchored around 119.40
“The Japanese yen could outperform amid a continued retreat in expectations for further near-term BOJ easing. This would leave the currency well positioned to benefit from any softer U.S. data flow or rise in risk aversion. Tactically we favour USD/JPY shorts.”
- CitiFX (based on Reuters)
Pair’s Outlook
The Greenback retreated from intraday losses on Monday, after having slumped nearly 150 pips. Today the USD/JPY is located in a rather small trading range between 119.10 and 119.80, the two clusters that attempt to hold the pair’s volatility. Technical studies again are not in favour of any specific outcome, whereas the 55-day SMA’s breach of the 200-day one to the upside three weeks ago suggests the Buck might soon rebound. However, no sharp movement today is expected, but the bullish momentum is still likely to prevail after an unexpected plunge on Monday.
Traders’ Sentiment
Less traders are confident in the US Dollar’s ability to outperform the Yen, as 61% of them hold short positions (previously 59%).
Gold's bulls are penetrating two-month downtrend
“The Middle East tensions will continue to support gold for the time being.”
- a trader in Hong Kong (based on CNBC)
Pair’s Outlook
Risk-averse sentiment among market participants made the precious metal increasingly buoyant on Monday. After piercing through the Nov-Dec downtrend line, gold approached a vital resistance in face of the weekly R2, monthly R1, upper Bollinger band and 55-day SMA at 1,084. However, the daily close was fixed around 1,075 and below the two-month trend-line. However, Tuesday morning we are seeing extra bullish momentum, which is pushing the bullion higher. Any consolidation above 1,075 will expose the 1,084 supply zone. Moreover, the bulls are getting additional support from monthly/weekly PPs at 1,065.
Traders’ Sentiment
Yesterday the portion of SWFX bullish positions deteriorated back to 54%, down from 56% where the share of the longs stood since Thursday of the previous week.
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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