Gold holds steady after light Monday session

Technical Analysis

EUR/USD oscillates below 1.09 by Tuesday

“As the euro zone currently seems to be in the calm eye of the current storm, and Draghi already had problems uniting the ECB for the December decision, we believe the ECB will keep dry the little powder it has left– at least for this week.”

- ING (based on WBP Online)

• Pair’s Outlook

  Trading was purely technical during Monday sessions in Asia, Europe and US. EUR/USD saw dropping trading volumes to the lowest level since January 3, which triggered a marginal downward volatility to push the pair under 1.09. It refrains to return back into the bearish pattern, meaning our short-term positive outlook remains relatively intact. The pair is required to surge above 100-day SMA at 1.10 to confirm its positive intentions, but much higher turbulence will probably have to wait until full-of-data Wednesday.

• Traders’ Sentiment

  The percentage of bullish open positions in the SWFX market has been flat at 44% since our previous report on Monday. At the same time, long pending orders in both 50 and 100-pip ranges from the spot tumbled to 50% and 44%, respectively.

GBP/USD on the edge of falling to a fresh six-year low

“Fundamentally, two big issues are weighing on sterling. One is Brexit and the other is that growth numbers have been on the weaker side and that's pushed back BOE hike expectations.”

- Societe Generale (based on Business Recorder)

• Pair’s Outlook

  The British currency retreated from intraday gains on Monday, ending the day with a 20-pip loss against the US Dollar. The GBP/USD pair now faces the 2010 low at 1.4230, as it has been trading in a strong bearish trend for the last five weeks. A sharp decline on Friday opened the door for a corrective rally up to 1.4440, where the down-trend lies; however, the weekly PP and monthly S2 form a rather strong supply around the 1.4380 area. Meanwhile, the Bollinger band and the weekly S1 should limit the dips in case UK fundamentals disappoint and push the Pound lower.

• Traders’ Sentiment

  For the fourth weekday in a row bullish market sentiment remains unchanged at 63%. The share of sell orders slid from 65 and 63%.

USD/JPY ignores risk-off sentiment

“At the heart of the yen's strength are falls in the yuan, which were perceived to be negative on the global economy. The yuan's fall also makes it less likely for the Fed to raise rates and nullify the existing reasons to bet against the yen.”

- Bank of America Merrill Lynch (based on Reuters)

• Pair’s Outlook

  On Monday the USD/JPY currency pair managed to partially recover last Friday’s losses, with trade closing at 117.31, just on top of the weekly PP. The pivot point is now providing immediate support, pushing the Greenback higher against the Yen, while the monthly S2 at 117.63 acts as the closest resistance. Although a slowdown in Chinese GDP failed to have an instant effect on the pair and strengthen the JPY, it did spark the risk aversion. As a result, the Buck could erase current gains and fall to 117.00, as technical indicators suggest with their bearish signals.

• Traders’ Sentiment

  Bears keep outnumbering the bulls, as 69% of all open positions are short, whereas the number of sell orders inched up from 51 to 54%.

Gold holds steady after light Monday session

“It seems unlikely that any particular group would put a floor under the gold price at this stage.”

- CMC Markets (based on CNBC)

• Pair’s Outlook

  On Monday the bullion has spent its most tranquil trading session this year. Prices of gold were broadly unchanged near the weekly pivot point at 1,089. The bulls decided to wait for more pronounced fundamental impetus, and even Chinese data is failing to move the metal during the Asian session on Tuesday. More events are scheduled for Wed-Fri, and disappointment there should encourage gold purchases with the bullish target at 1,100. In the next 24 hours, however, trading is likely to keep balance between the long and short market participants.

• Traders’ Sentiment

  In the morning on January 19 somewhat more than 55% of all SWFX traders are betting on the bullion's increase in price in the nearest future, no change over the last 24 hours.

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