EUR/USD steady for eight consecutive day

Technical Analysis

EUR/USD steady for eight consecutive day

“The dollar is seeking its direction now.”

- Mitsubishi UFJ Trust and Banking (based on MarketWatch)

• Pair’s Outlook

  Since the first day of April the EUR/USD pair has been ending all trading sessions with no material change in its value, while the volume has been in a decline too. On Tuesday morning the conditions are similar, even though the cross is now hovering above 1.14. Thus, we keep our reasonably bullish bias and the mid-term caps should be found at 1.15 (October high). Daily technical indicators are positive as well. Any intraday losses, although they are less likely, will initially have to tackle the weekly pivot point at 1.1391.

• Traders’ Sentiment

  For the first time in six working days the total percentage of bullish transactions went up above 40%. As for pending orders, 52% of them in the 50-pip range around the spot are going short with respect to the 19-nation currency, while the 100-pip orders are 60% bearish.

GBP/USD risks falling back under 1.42

“We’re definitely near the end for the dollar bull run if we have not already seen the peak. We’re clearly in this topping-out process.”

- Standish Mellon Asset Management Co. (based on Bloomberg)

• Pair’s Outlook

  The Sterling set off with a 125-pip rally against the Buck yesterday, unable to climb over the second tough resistance area. Technically, we should see the Cable bounce back under the 1.42 major level, with the weekly PP now acting as the nearest support at 1.4151. However, today’s UK inflation data could provide sufficient impetus for the GBP/USD currency pair to at least partially pierce the immediate resistance, as the four-week down-trend at 1.4290 is expected to hold. Daily technical indicators are still unable to provide any clear sense of direction, whereas the longer timeframe ones still suggest the bearish momentum is to prevail.

• Traders’ Sentiment

  Traders remain long the Pound, namely 64% of them (previously 66%). Meanwhile, the share of buy orders dropped from 65 to 58%.

USD/JPY to begin climbing up

“Today we saw people taking profits on their bets for now. But the dollar remains weak and looks likely to fall further in the near future.”

- a trader at a major Japanese bank (based on Reuters)

• Pair’s Outlook

  After more than a week of declines the USD/JPY remained almost completely unchanged on Monday, indicating a possible trend reversal. The 18-month low, which is now bolstered by the Bollinger band, appears to have provided sufficient support for a rebound. The Greenback is now likely to edge higher, but with the monthly S2 and the weekly PP still forming a rather strong resistance area around the 109.00 psychological level. Technical studies, on the other hand, are giving mixed signals, implying that the given pair could remain relatively unchanged for the third consecutive time today.

• Traders’ Sentiment

  There are 70% of traders being long the US Dollar, compared to 72% on Monday. At the same time, the number of orders to sell the American Dollar grew larger, taking up 58% of the market (previously 54%).

Gold sets ground for continuous recovery

“There are a number of positive demand catalysts, including steady fundamental demand from China and India, systematic central bank purchases, and U.S. inflows into the physical gold ETFs.”

- RBC (based on Wall Street Journal)

• Pair’s Outlook

  Monday trading was finished with sharp gains for gold, as the price closed above the first weekly resistance line at 1,257.50. However, the bulls failed to extend this rally up to the second supply area placed between 1,260 and 1,263. We expect it to happen this week, but we are not ruling out a correction lower on Tuesday after some traders fix profit. It will be more than enough to hold the price above yesterday's low/opening level of 1,239. Among additional bearish risks, the daily technical studies are still maintaining the "sell" view, but dense demand areas below 1,235 should prevent XAU/USD from deep collapses.

• Traders’ Sentiment

  In the morning on Tuesday only a third of SWFX market participants have held long positions on the bullion. This is down from 37% we had seen 24 hours ago and 51% on Friday.

 

 

 

 

 

 

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