Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD skyrockets 230 pips to reach 1.1150
“The dollar’s weakness looks like a correction in its multi-year bull trend given the Fed is still more likely than other major central banks to tighten rather than ease monetary policy this year.”
- Royal Bank of Scotland (based on Bloomberg)
Pair’s Outlook
Poor services data from the US hit the Dollar on Wednesday. EUR/USD touched the highest level since October, while crossing several crucial resistances. Those included 100 and 200-day SMAs at 1.0958/1.1052. Additionally, it erased Dec-Jan and Aug-Oct downtrends. The pair should trade above 200-day SMA on Thursday in order to confirm medium-term bullish expectations. The key short-term supply is also represented by weekly R3/monthly R2 at 1.1115. Success here will push odds in favour of a spike to monthly R3 at 1.1246 and Sep 2015 high at 1.1460 in the long-term.
Traders’ Sentiment
The portion of long positions went up to 45% (41% yesterday). On top of that, 60% of all pending orders are presently set to buy the 19.
GBP/USD to launch another attack on monthly R1
“Of the Fed officials due to speak today, focus will be on whether Mester turns dovish.”
- Mizuho Securities (based on Reuters)
Pair’s Outlook
Yesterday, amid broad USD weakness the Cable soared through the weekly R2 and even managed to test the 1.4681/53 resistance area, which consists of the weekly R3 and monthly R1 levels. Since the rally amounted to more than 190 pips, today we may expect a bearish correction to take place. The price will probably stabilise near 1.4533 and then make another attempt to conquer 1.4681/53. Above this resistance GBP/USD should aim for the 55-day SMA at 1.4754.
Traders’ Sentiment
The number of long positions increased by 12 pp; however, the sentiment is neutral—55% of traders are bulls and 45% are bears. Meanwhile, the share of sell orders went up from 56 to 61%.
USD/JPY en route to 2015 minimum
“Global risk off is claiming its next victim. The BOJ tried to respond with negative rates, ECB tried to sound more dovish. The next target for markets is the Fed.”
- Crédit Agricole (based on MarketWatch)
Pair’s Outlook
During the last two days USD/JPY has nearly negated all its gains after Jan 19, as the monthly pivot point was unable to stop Dollar’s depreciation yesterday. The currency pair is now testing the next monthly pivot at 117.50, which has a good chance of triggering a rally before another bearish wave. The Buck might rebound up to the weekly S1 at 118.62. Nevertheless, the price should soon slide down to 116 yen, where we are likely to see strong demand because of the last year’s low.
Traders’ Sentiment
Interestingly enough, precipitous decline did not materially affect the distribution between the shorts (69%) and longs (31%). In the meantime, the portion of sell orders plunged from 75 to 55%.
Gold awaits consolidation above 200-day SMA
“The Federal Reserve will keep monetary policy looser than previously anticipated in the months ahead as global economic headwinds prompt officials to postpone their hiking plans until the second half of 2016.”
- BMI Research (based on CNBC)
Pair’s Outlook
American currency weakened across the board yesterday, while pushing safe-haven prices further to the upside. XAU/USD penetrated 200-day SMA for the first time since October, while nearing the first monthly resistance at 1,143. This supply is strengthened by weekly R2 and 2015 downtrend at 1,145/47. A climb above them will shift our attention to the May-Oct trend-line at 1,164. Alongside, ability to fix gains above 200-day SMA on Thursday will proclaim that bullish sentiment is strong. As for daily aggregate technical indicators, the signal is maintaining a mixed stance today.
Traders’ Sentiment
Over the last 24 hours of trading the share of long positions on the SWFX market dropped by two percentage points to 53% from 55%.
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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