GBP/USD on the edge of falling under 1.43

Technical Analysis

EUR/USD at risk of sinking from weekly R2

“We’re seeing many investors unwinding their long-dollar bets.”

- IG Asia Pte (based on Bloomberg)

• Pair’s Outlook

  With recovering volume of trading, the Euro continued to grow in value against the Greenback on Wednesday. Consolidation above the first downtrend line led to a spike above the second downtrend placed near 1.1325. The rally was capped by the weekly R2 at 1.1337, which is the last supply under the February high at 1.1377. We would allow for a short-term correction lower, but dips below 1.12 are unlikely today. Alongside, by eroding the upper Bollinger band at 1.14 the cross will set eye on the October 2015 high at 1.1495.

• Traders’ Sentiment

  The bullish share was sent down to from 43% to 42% yesterday. Alongside, pending orders tanked much below 50% by Thursday morning, as 55% of all commands, placed in the 100-pip range from the spot, are now set to go short on the Euro zone's currency.

GBP/USD on the edge of falling under 1.43

“The USD sell-off is broadening, and risks are that it continues to disappoint bulls in the near term. But as we look ahead, we wonder about the sustainability of this trend. So we find ourselves in a position where the stronger USD cycle does not look complete, yet the near-term triggers of a resumption of this cycle are scarce.”

- ANZ (based on Reuters)

• Pair’s Outlook

  Upon putting the monthly R1 to the test, the GBP/USD currency pair failed to maintain gains and retreated, closing below the 1.44 level. The Supply, represented by the weekly R1, at 1.4393 proved to be sufficient to keep the Sterling from appreciating against the Buck, thus, another bearish development today is likely. The nearest support is located around 1.4250 in face of the weekly PP, the 20 and the 55-day SMAs. However, there is still a possibility of the Cable rising higher today on positive fundamental data, with the ceiling being the 1.45 psychological level, as it kept the pair at bay for more than a month.

• Traders’ Sentiment

  Market sentiment once again shifted to the bullish side, but remains close to equilibrium, with 53% of all open positions being long. There are now 52% of orders to purchase the British Pound (previously 43%).

USD/JPY keeps sliding down

“The game changer for me is Yellen was extremely specific...mentioning the currency … saying the dollar cannot go higher. From a currency perspective, that's pretty important…It was a really explicit (message).”

- Jesper Bargmann, Nordea Markets (based on CNBC)

• Pair’s Outlook

  The Greenback’s losses against the Japanese Yen yesterday were limited, due to the ADP Employment Change data beating expectations. Nonetheless, the USD/JPY currency pair remains under pressure, with the weekly PP and the 20-day SMA, namely the closest resistance cluster, continuing to weigh on Buck. The bearish momentum is still expected to last until the exchange rate reaches the current descending channel’s support line near the 110.50 level. The only obstacle on the given pair’s path is support area circa 111.60, represented by the weekly S1 and the lower Bollinger band.

• Traders’ Sentiment

  Today 70% of traders hold long positions, compared to 72% on Wednesday. Meanwhile, there are nearly three quarters (73%) of orders to sell the US Dollar (previously 55%).

Gold undecided near technical cluster at 1,227/33

“It is difficult to get bearish on gold at this stage given that the Fed has made it quite clear that it is reluctant to raise rates, this despite signs that the U.S. economy is doing fairly well.”

- INTL FCStone (based on CNBC)

• Pair’s Outlook

  Prices of the yellow metal are increasingly turbulent this week, as the volume of daily trading has not rebounded to pre-Easter levels yet. Gold failed at the two-month uptrend (1,242.50) yesterday and slid back below the cluster of important levels located between 1,233 and 1,227. Ability to hover below the lower bound of this technical bunch will fuel a new round of bearish concerns. The bears keep focused on the 1,200 area (weekly S1/Bollinger band/55-day SMA), and this downward idea is backed by aggregate technical indicators today.

• Traders’ Sentiment

  Only one percent of all positions in the SWFX market have been recovered by the bulls, as they pushed their portion to 40% by Thursday morning. This is up from only 39% yesterday, the lowest mark in several working days.

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