Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD aims at 1.08 after dovish ECB
“Mario Draghi made it quite plain that given the recent drops on oil prices that the policy response in March will potentially have to change, replacing 'whatever it takes' with 'no limits'.”
- CMC Markets UK (based on WBP Online)
Pair’s Outlook
EUR/USD attempted to violate the 1.08 support zone yesterday after soft comments made by the ECB President Draghi. The pair pulled back to 1.0870 by the end of trading, but today the second wave of selling is possible. As long as the pair keeps trading within triangle, the outlook will remain neutral, as suggested by daily technical indicators. In case 55-day SMA and monthly PP are crossed, the next effective demand will be offered by the monthly S1 at 1.0565. Key resistance remains 1.0978/1.1051 (100/200-day SMAs).
Traders’ Sentiment
SWFX bears remain in the majority of 55% for open positions. At the same time, more than 50% of all pending orders in 50-pip range from the spot are now set to acquire the Euro, even though 100-pip commands remain 55% short.
GBP/USD on the edge of closing below 1.41
“The pound has tumbled this year and, based on both fundamentals and valuations, we believe this depreciation is excessive.”
- BlackRock (based on Bloomberg)
Pair’s Outlook
The Cable managed to climb 31 pips higher yesterday, despite having dropped to the lowest in six years earlier that day. Even though the pair has been recovering for the past two days, risk of it slumping today and piercing the weekly S1 increased. As a result, the GBP/USD could even put the monthly S3 to the test, while bearish technical indicators are bolstering the possibility of the negative outcome. However, a positive surprise in fundamental data could also trigger a rally, with the Pound confirming the down-trend, which in turn is bolstered by the weekly PP and the monthly S2.
Traders’ Sentiment
Bulls grew in numbers, as 67% of all open positions are now long. Meanwhile, the portion of buy orders added 22% points up to 54%.
USD/JPY rises on QQE speculation
“I think the BOJ knows the logic of a selloff at the time of a risk-off mood, no need to go out of its way to ease when the market is overshooting .”
- Bank of Tokyo-Mitsubishi UFJ (based on Market Watch)
Pair’s Outlook
The US Dollar unexpectedly outperformed the Japanese Yen on Thursday, amid rumours of the BoJ applying more monetary stimulus. The USD/JPY was able to erase this week’s losses, with the bullish trend prevailing earlier today as well. As a result, the Greenback could also negate previous week’s losses if it managed to pierce the weekly R1 level just above 118.00. The pair has the potential to rise to 118.46, where the 20-day SMA rests; however technical studies suggest a sell-off is possible, with the immediate support cluster doubtfully limiting the dips.
Traders’ Sentiment
Today 71% of traders are short the Buck, compared to 70% on Thursday. The share of purchase orders increased from 34 to 54%.
Gold: negative outlook below 1,104/08
“A gold-bull market that relies too heavily on safe-haven related demand may not be sustainable in the long run.”
- HSBC (based on CNBC)
Pair’s Outlook
Near-term outlook for gold is moderately bearish. We see the formidable resistance zone ahead of the bullion, represented by 100-day SMA and Jan 8-20 downtrend at 1,104/08. Any close above here should trigger a rally, but the bulls are likely to struggle at 1,126/32 (monthly R3/200-day SMA). On the bearish side, we would allow for a selloff down to 1,087 (20-day SMA and monthly R1), followed by two-month uptrend and 55-day SMA at 1,076. A drop below here will increase downside pressure on gold in the mid-term, but some support should be in place at 1,065 (monthly PP) and at 1,046 (2015 low) later.
Traders’ Sentiment
Advantage of long traders has been unchanged over the last 48 hours, as they continue holding about 55% of all open transactions in the SWFX market.
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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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