Dukascopy Bank Team
Dukascopy Bank SA
Technical Analysis
EUR/USD consolidates below 1.09, eyes weekly S1
“We’re going to continue to see (stimulus) policies coming out of the ECB and the BoJ.”
- Macquarie Limited (based on Reuters)
Pair’s Outlook
EUR/USD has ultimately confirmed its bearish intentions, as it managed to hold below the Jan-Feb uptrend for two days in a row. The first support today is offered by the weekly S1 at 1.0852, but any encouraging US ADP numbers later in the day may provoke a sell-off down to 1.0809, namely the Feb low. Ability to pierce through the latter will expose the third demand zone for Wednesday at 1.07 (Jan low, monthly S1). On the other hand, weekly technical indicators are long and we are not ruling out the possibility of a rebound toward the 100-day SMA, the first resistance, at 1.0928 over the next 24 hours.
Traders’ Sentiment
Bullish advantage over the bears amounts to ten percentage points in the SWFX market. Adding to that, 54-55% of all pending orders are set to sell this currency pair in 50/100-pip ranges from the spot price.
GBP/USD expected to stabilise in the red zone
“The bias of the market is already short sterling and is already looking for the Bank of England to remain very dovish.”
- Dominic Bunning, HSBC (based on Business Recorder)
Pair’s Outlook
On Tuesday they Sterling managed to put the immediate resistance, namely the weekly PP, to the test, but trade still closed nearly 60 pips away from that level. The bullish momentum might once again push the Cable towards the nearest resistance or even higher if the fundamental data provides sufficient impetus, which could then result in a rally towards the second cluster around 1.4155. Technical studies, on the other hand, retain their bearish signals, implying that the overall four-week bias remains bearish. Consequently, a bearish development, if such occurs, is likely to be limited by the support area around 1.3740, represented by the Bollinger band and the weekly S1.
Traders’ Sentiment
Although not as strong as yesterday, but market sentiment remains bullish at 60%, while the share of purchase order slid from 59 to 54%.
USD/JPY in limbo at 114.00 ahead of ADP data
“The BOJ’s minus rate revealed the limits of policy, providing a factor that pushed up the yen. One has to acknowledge the limited impact of interest-rate policy on currencies.”
- Shinji Kureda, Sumitomo Mitsui Banking Corp (based on Bloomberg)
Pair’s Outlook
The return of risk appetite and better-than-anticipated US manufacturing data caused the Greenback to erase all Monday’s losses against the Yen yesterday. However, risks of edging lower again today persist, despite the USD/JPY currency pair being supported by the 20-day SMA and the weekly PP just below the opening price of 114.00. This cluster could fail to keep the pair afloat and trigger a sell-off all the way down back to the 112.00 major level. Meanwhile, technical indicators keep giving mixed signals, thus, a possibility of the Buck reaching 15.00 yen, where the monthly PP coincides with the weekly R1, exists.
Traders’ Sentiment
Nearly three quarters (74%) of all open positions are now long, whereas the portion of buy orders inched up from 52 to 57%.
Gold risks falling under February uptrend
“The selling (in gold) will likely continue going into Wednesday's session, especially if we see another round of strong buying set in over global equity markets.”
- INTL FCStone (based on CNBC)
Pair’s Outlook
Growing risk appetite across global stock markets pushed investment out of the safe haven metal, which bounced off daily highs at 1,248 yesterday. The February uptrend, currently at 1,222, is now at risk of being tested on Wednesday. Bearish success here offers the opportunity to send XAU/USD down to the 1,205/1,199 support cluster that consists of monthly PP, 20-day SMA and weekly S1. Moreover, there we have another demand in face of the January uptrend. However, daily indicators remain long on gold. If the weekly PP (1,225) holds ground, firstly the bulls will have to test recent peaks near 1,250.
Traders’ Sentiment
Over the past 24 hours the bulls have gained 19 pp to push distribution between them and bearish market participants to a completely neutral level of 50-50%.
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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