USD/JPY retains post BoJ weakness

Technical Analysis

EUR/USD at weekly highs, nearing 1.14

“We are still biased for the EUR to remain an under performer and while under 1.14/1.1465 we look for this rate to work back lower within the range towards 1.10/1.08.”

- Lloyds (based on Exchange Rates UK)

• Pair’s Outlook

  Five days of gains for the Euro, including Friday, is a direct result of US Dollar's inability to consolidate momentum, while weak fundamentals are only fuelling the rally. Yesterday EUR/USD breached the weekly R1 at 1.1341, meaning at the moment the pair is a position to advance up to the last week's peak at 1.1398. The most substantial resistance, however, is placed higher at 1.1490 where the bulls are going to encounter the February-April uptrend line and the October 2015 high. In the meantime, bullish outlook is boosted by the fact that the 100-day SMA has just crossed the less-volatile 200-day SMA to the upside.

• Traders’ Sentiment

  40% of market participants keep maintaining the bullish stance on the matter, down from 42% yesterday. Pending orders within 50 pips from the spot are equally distributed between the bulls and bears.

GBP/USD sets eye on 1.47

“With 8 weeks to go the momentum does seem to be with the 'Remain' campaign. So far it has been a relatively orderly depreciation. There is a fair chance that investors will get a bit more nervous in the run-in.”

- Bank of Tokyo-Mitsubishi (based on Reuters)

• Pair’s Outlook

  Disappointment in yesterday’s US GDP figures caused the Cable to negate Wednesday’s losses, but the immediate resistance in face of the monthly PP and the weekly R2 remained intact. The Sterling is expected to retain its strength, thus, edge higher against the US currency again. Gains are likely to be limited around the 1.4660 mark, with resistance there represented by the weekly R2 and the Bollinger band. In case supply fails to keep the GBP/USD pair from appreciating, price should stabilise near the 1.47 major level, only 200 pips away from the final resistance line. Medium-term technical indicators are now giving mixed signals, suggesting that the down-trend could be reached next month.

• Traders’ Sentiment

  There are 54% of traders being short the Sterling today, the majority of all pending orders, namely 65%, are to sell the British Pound.

USD/JPY retains post BoJ weakness

“Divergence in favor of the dollar isn’t going to come from the BOJ or European Central Bank easing. It’s going to have to come from a Fed hike, but there’s no clear indication yet that it’s on the horizon.”

- Amherst Pierpont Securities LLC (based on Bloomberg)

• Pair’s Outlook

  The American Dollar suffered a heavy loss on Thursday, triggered both by the BoJ’s decision and a poor reading of the US GDP. Even though the USD/JPY currency pair managed to close trade above the 108.00 major level, the 18-month low is still under the risk of being violated. Unless demand at this low is insufficient to trigger a rebound, the next target will be the support cluster around 106.65, represented by the Bollinger band, the monthly S3 and the weekly S2. Meanwhile, technical indicators are unable to confirm the bearish scenario completely, but no impetus today is expected to cause the bullish momentum to return after yesterday’s slump.

• Traders’ Sentiment

  Market sentiment remains unchanged, with bulls still taking up 74% of the market. The share of sell orders increased from 52 to 57%.

Gold to target March high at 1,284.53

“I would not be surprised to see all-time highs in this next leg of the precious-metals cycle.”

- Tocqueville Gold Fund (based on MarketWatch)

• Pair’s Outlook

  The bullion booked a tremendous rally on Thursday, as a very decisive bullish action managed to close the daily trading above the most important resistance of 1,258/63 represented by the weekly R1 and February high. Boosted by weaker US Dollar, gold is now fluctuating at peak levels since mid-March. We give a quite uplifted likelihood to a testing of the March high at 1,284.53, which is backed by the weekly R2 at 1,286. While technical indicators on daily/weekly time frames are strongly positive, we would not rule out a mid-term spike towards the channel's trend-line and 2015 high at 1,307.

• Traders’ Sentiment

  Sentiment of the SWFX market tanked over the past 24 hours, as various bullish transactions were forced to close amid large-scaled profit-taking. There are only 36% of long open positions this Friday morning, down from 42% yesterday.

 

 

 

 

 

 

 

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