USD/JPY in limbo ahead of Yellen’s speech

Technical Analysis

EUR/USD breaks resistance at 1.1281 on Friday

"EUR/USD may be preparing ing for a substantial mark-up."

– Jamie Saettele CMT (based on Daily FX

• Pair's Outlook
  The common European currency started Friday's trading session just below the weekly pivot point at 1.1281. However, without any fluctuations to the downside, the currency exchange rate broke the resistance provided by the pivot point. The currency pair had broken the resistance also on Thursday. At the moment, the pair faces no resistance up to the level of 1.1353, where the second monthly resistance is located at. oreover, aggregate technical indicators forecast a surge for the day. These facts combined assure that the rate is going up.

• Traders' Sentiment
  Traders remain bearish on the pair, as 62% of open positions are short on Friday. However, in the past sessions it seems to be slowly moving to the bullish side. In the meantime, pending orders are 57% short.

GBP/USD attempts to reclaim 1.32

"The strength of post-Brexit data, much monetary easing already priced into the rates market and a generally weak dollar should allow pound to rally towards $1.3450."

- Morgan Stanley (based on Business Recorder)

• Pair's Outlook
  The GBP/USD currency pair declined on Thursday, amid stronger-than-expected US fundamentals boosting the American Dollar that day. As a result, the pair slid back under 1.32, but technical indicators retain mixed signals, creating a possibility for another rally. Another bullish outcome would mean a breach of the immediate resistance, namely the weekly R1, opening the door for a surge towards the 1.33 major level and perhaps even towards the second resistance area around 1.3350. However, we should not rule out the Cable experiencing another leg down, leading to a break through the monthly PP at 1.3170.

• Traders' Sentiment
  Traders' sentiment remains bearish, now at 58%, compared to 56% on Thursday. At the same time, the portion of orders to acquire the British Pound increased from 44 to 58%.

USD/JPY in limbo ahead of Yellen's speech

"If Yellen shows less confidence about the U.S. economy, maybe people would like to buy the yen more, but I also think there are longterm investors who step in to buy dollars whenever it falls below 100 yen, so I think it will stay around current levels for a while."

- Masashi Murata, BBH (based on Reuters)

• Pair's Outlook
  During the previous three days the USD/JPY currency pair remained almost completely muted, awaiting for the Fed president to speak today. According to technical studies and other data, Yellen is likely to be dovish, which would lead to another US Dollar sell-off. Moreover, the Buck then risks falling under the 100.00 yen level, with the nearest area to limit the losses being the cluster around 99.45, represented by the weekly S1 and the Bollinger band. A breach of this area would expose the 99.00 mark, as well as the second support area circa 98.70, which is the final obstacle before the Greenback could begin falling towards the descending channel's lower border around 95.50.

• Traders' Sentiment
  Bulls remain in the majority, taking up 70% of the market today. Meanwhile, 61% of all pending orders are to purchase the Buck.

Gold remains squeezed in on Friday

"Interest in the precious metal continues to grow, with funds adding 43 million shares in the SPDR Gold ETF during the second quarter, after a 46 million-share gain in the first quarter."

– based on Bloomberg

• Pair's Outlook
  The yellow metal changed direction on early Friday morning, as it found support in the second weekly support level at 1,322.62, and the metal is most likely to surge to the 55-day SMA at 1,328.15. Previously gold fluctuated around these two levels, as the commodity finds support in the weekly S2 and in the meantime is not capable of breaking the 55-day SMA. The bullion got squeezed in between these two levels on Wednesday, as the metal fell to the weekly S2. However, daily aggregate technical indicators forecast a downfall for the bullion during today's trading session.

• Traders' Sentiment
  Traders are neutral bearish on the pair, as 51% of open positions are short. In the meantime, pending commands are 60% long on Friday.

 

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