Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD nears third monthly resistance line
“Expectations are growing by the day that the Fed will not hike again this year given the weaker growth picture and tightening financial conditions.”
- Bank of New Zealand (based on Bloomberg)
Pair’s Outlook
European common currency continued rallying versus the Greenback on Thursday, by adding 104 extra pips to end the American session at 1.1207. Bottom line: the EUR/USD cross managed to consolidate above 200-day SMA and violated the closest resistance at 1.1115 (weekly R3; monthly R2). Now the focus is turning to the last February monthly supply level at 1.1246, which is only followed by Sep 2015 high at 1.1460. We are watching US payrolls very closely, and a miss of an average forecast should see the pair climbing above the monthly R3.
Traders’ Sentiment
Bullish side of open positions advanced by three percentage points to 48% this morning, while pending orders are staying above the 50% threshold for a second day in a row.
GBP/USD consolidates below monthly R1
“An abrupt and total interruption to incoming capital flows in response to a 'Brexit' could see [Sterling] decline by as much as 15-20 percent.”
- Goldman Sachs (based on Reuters)
Pair’s Outlook
GBP/USD is currently retreating from the monthly R1, but the currency pair retains potential to go higher from here. Above 1.4680 dollars the Pound should target the 55-day SMA at 1.4740. If the latter resistance is breached as well, the rally will likely travel up to 1.50, the level where the six-month down-trend is reinforced by the 100-day SMA. Our long-term bias, however, remains bearish, and the negative outlook is strengthened by the weekly and monthly technical indicators mostly pointing south.
Traders’ Sentiment
The sentiment is neutral, being that 51% of open positions are long and 49% are short. A similar situation is observed with the orders: 52% are to buy and 48% are to sell the British Pound.
USD/JPY approaches 116 yen
“The charts suggest the short dollar/yen trade is still the advantageous trend trade.”
- IG (based on CNBC)
Pair’s Outlook
USD/JPY violated a yet another monthly pivot, closing 110 pips lower yesterday. As a result, there are no more significant supports separating the pair and the 2015 low, which is expected to trigger a bullish reaction that may take us back to 117.50. In the meantime, if demand at 116 yen fails to stop the sell-off, the next potential reversal point is seen only at 101 yen, namely the 2014 low. And although these are speculations, the BoJ seems unwilling to let the national currency strengthen this much.
Traders’ Sentiment
The bears remain in the lead with 68% of the SWFX market. As for the distribution between the buy and sell orders, 52% are to purchase and 48% are to sell the Buck against the Yen.
Gold to appreciate for sixth consecutive day
“We see no compelling reason for more than a normal retracement before bullion resumes an upward move. The rally is underpinned by risk-off sentiment, a weaker dollar and a shift in global monetary policy.”
- HSBC (based on CNBC)
Pair’s Outlook
Yellow metal remains increasingly buoyant for the moment, given global economic uncertainty and expectations that the Fed will keep interest rates low. Yesterday gold eroded the monthly R1/weekly R2/downtrend at 1,143/47 and was only limited by the Sep 2015 high at 1,156. However, possibly poor US jobs data might be another bullish signal for bullion traders and the key focus will then shift to even higher levels in the area of 1,162/64 (weekly R3; May-Oct 2015 downtrend), followed by the second monthly resistance and Aug 2015 high at 1,168/70.
Traders’ Sentiment
SWFX market sentiment has been steady since our latest report on this precious metal. Somewhat around 53% of all traders are holding long open positions, but it seems to be a quite unstable and fragile majority.
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.
Recommended Content
Editors’ Picks
EUR/USD manages to hold above 200-hour SMA ahead of Eurozone CPI, FOMC
EUR/USD meets with some supply during the Asian session on Tuesday and erodes a part of the previous day's gains amid the emergence of fresh US Dollar buying. Spot prices, however, remain in a familiar range held over the past week or so and currently trade around the 1.0700 round-figure mark.
GBP/USD consolidates its gains above 1.2550, investors await Fed rate decision
GBP/USD consolidates its gains near 1.2560 after flirting with the key 200-day SMA and three-week highs in the 1.2550-1.2560 zone during the early Tuesday. Investors reduce their bets on BoE rate cuts, which support the Cable.
Gold price traders remain on the sidelines ahead of FOMC decision on Wednesday
Gold price remains confined in a narrow range as traders prefer to wait on the sidelines. Reduced Fed rate cut bets revive the USD demand and act as a headwind for the metal. Investors now await the FOMC decision and US macro data before placing directional bets.
BNB price risks a 10% drop as Binance founder and ex-CEO Changpeng Zhao eyes Tuesday sentencing
Binance Coin price is dumping, with the one-day chart showing a defined downtrend. While the broader market continues to bleed, things could get worse for BNB price ahead of Binance executive Changpeng Zhao sentencing on Tuesday, April 30.
Data fuels China optimism
China's factory activity has expanded for a second consecutive month, marking the best streak in over a year and fueling optimism for the sustainability of the world's second-largest economy's recovery.