Daily Technical Analysis for Majors by Dukascopy

[Anastasia DC]

GBP/USD to remain above 1.31 today

"UK data continues to stifle the scaremongers. While this data-set is clearly not post-Brexit itself, solid figures running into the referendum and also strong business investment figures suggests the whole debacle perhaps wasn't as bad as previously thought around the month of June."
- Dane Williams, Foenix Partners (based on Business Recorder)

Pair's Outlook
The GBP/USD currency pair retreated from its intraday gains on Friday and ended the day with a 53-pip loss, amid Fed Yellen's statement that there might be two rate hikes by year's end. However, despite this decline the Cable is expected to edge higher, as technical studies in the daily timeframe suggest. On the other hand, the weekly and the monthly PPs form a strong resistance area around 1.3160, that could prevent the pair from posting gains of more than 30 pips. Due to lack of impetus, a 30-pip rally might be all that the Sterling could squeeze out today, which would still support the positive outlook.

Traders' Sentiment
There are 56% of traders with a negative outlook towards the Cable today, compared to 58% on Friday. Meanwhile, the share of purchase orders remains basically unchanged, as it dropped from 58 to 55%.

 

[Anastasia DC]

USD/JPY to remain above 102.00

"With the US Dollar Index still sitting at higher time frame support, I still see the greater risk reward and ability to take advantage of the chance of a market re-pricing coming by playing USD from the long side."
- Vantage FX (based on WBP Online)

Pair's Outlook
The Greenback strengthened across the board on Friday, triggered by Fed Yellen's surprisingly hawkish statement that day. As a result, the USD/JPY currency pair surged more than 130 pips, while also opening above the 102.00 major level today. A bearish development today is unlikely, but possible, as technical indicators are unable to provide a clear sense of direction. A strong rally is to be limited by the cluster circa 103.60, represented by the weekly R1 and the Bollinger band, whereas the nearest support rests only around 101.20. However, in case the immediate resistance fails to keep the US Dollar at bay, the second resistance area around 103.15 is expected to succeed.

Traders' Sentiment
Today 68% of all open positions are long (previously 70%). At the same time, the number of purchase orders increased from 61 to 76%.

 

[Anastasia DC]

Gold trades below 1,320 level on Monday

"Gold dropped for a seventh day, heading for the longest run of declines since May, as comments from leading central bankers boosted speculation that U.S. interest rates may rise as soon as next month, buoying the dollar."
– based on Reuters

Pair's Outlook
The yellow metal moved below the 1,320 mark on Monday morning, as the metal is in its seventh consecutive session of decline. During this session, the commodity formed a downward aimed channel pattern, which indicated that the rate is set to reach at least the monthly S1 at 1,315.53 during today's trading session. Gold is most likely to rebound against this level, as it is also supported by the close by located weekly S1 at 1,310.87 and lower Bollinger band at 1,309.18. Previously, gold experienced high volatility on Friday, as Janet Yellen hinted at two possible rate hikes during 2016.

Traders' Sentiment
Traders are 54% bearish on Monday. In the meantime, pending commands are 62% to buy, which indicates at a possible upcoming surge, as the metal will find support later in the day.

 

[Anastasia DC]

EUR/USD trades lower on Tuesday morning

"The annual inflation rate in the 19-nation euro area was just 0.2 percent in July. It probably barely picked up to 0.3 percent in August, according to a Bloomberg survey of 45 economists before the figures are published next week."
– based on Bloomberg

Pair's Outlook
The common European currency is threading lower against the US Dollar, as the rate has retreated below the Monday's opening price of 1.1174. Previously, on Monday the rate bounced between 20 and 100-day SMAs from the upside around 1.1215 and the 55-day SMA from the downside at 1.1151. It seem that the fall of the rate on Tuesday morning is a continuation of the previous limbo. However, as the SMAs have a downwards aimed direction, it is most likely that the rate will fall, as soon as it stops bouncing between the levels.

Traders' Sentiment
Traders remain bearish on the pair, as 61% of open positions are short on Tuesday. In the meantime, pending commands are 53% short.

 

[Anastasia DC]

GBP/USD struggles to remain above 1.31

"The factors that are contributing to the strong cyclical and secular U.S. dollar outlook remain."
- Deltec International Group (based on Bloomberg)

Pair's Outlook
Even though the British currency failed to outperform the American Dollar on Monday, it lost only 13 pips that day, managing to retain its position above the 1.31 mark. The 1.31 level keeps providing psychological support, also bolstered by the 20-day SMA, which could trigger some GBP-buying. Technical indicators are now also in favour of a rally, but the resistance area circa 1.3160, namely the weekly and the monthly PPs, remains strong. In case bulls do prevail, a close at 1.3150 will be the most probable outcome, whereas a bearish development could lead the Cable further down towards 1.3025—where the weekly S1 rests.

Traders' Sentiment
Today there are 53% of traders holding short positions (previously 56%), while the number of purchase orders slid from 55 to 48%.

 

[Anastasia DC]

USD/JPY in tight range between 101.00 and 102.50

"If the payrolls figure is strong, the dollar could move toward a test of the 105 level against the yen."
- Daiwa Securities (based on Business Recorder)

Pair's Outlook
On Monday the USD/JPY currency pair remained relatively unchanged, but still edged below the 102.00 major level. Nevertheless, the pair appears to be anchored around the 102.00 mark, with the lower border represented by the cluster around 101.20, represented by the 20-day SMA and the weekly PP. At the same time, a strong resistance area circa 102.75, formed by the weekly R1, the Bollinger band and the 55-day SMA, is likely to limit any possible gains. According to technical indicators no significant movements are expected to occur, therefore, suggesting that the pair is to consolidate between the mentioned borders.

Traders' Sentiment
Bullish traders' sentiment returned to its previous Monday's level of 67%, whereas the share of buy orders edged down from 76 to 63%.

 

[Anastasia DC]

Gold trading above 1,320 mark on Tuesday

"Gold held steady on Tuesday as investors swooped in after the metal fell to near five-week lows, while markets wait to see how U.S. nonfarm payroll data due later this week will play into the timing of any rate hike."
– based on Reuters

Pair's Outlook
The yellow metal opened Tuesday's trading session higher than the previous Monday's close, as the metal traded above the 1,320 level on Tuesday morning. It is most likely that the bullion will surge at least to the level of 1,327.75, where the weekly PP is located at. However, gold will probably bounce off the resistance and move lower, as the weekly PP is also supported by the 20 and 55-day SMAs respectively at 1,333.08 and 1,329.49. Due to that, on a daily timeframe the yellow metal's price will remain unchanged.

Traders' Sentiment
SWFX trader sentiment remains unchanged on Tuesday, as 54% of open positions are short. In the meantime, 61% of open commands are to buy the yellow metal.

 

[KristinaDC]

EUR/USD rebounds and surges on Wednesday

"Near term, the line that extends off of the May and July lows has served as resistance. I'm still employing 1.11 (late May low and close to Brexit day close and 200 day average) as the bull/bear dividing line."
– Jamie Saettele, CMT, (based on Daily FX)

Pair's Outlook
The common European currency rebounded against the support provided by the weekly S1 at 1.1132, and it is surging on Wednesday morning, as the rate faces no resistance up to the level of 1.1203, where the 20-day SMA is located at. The before forecasted rebound happened in accordance with the previous prediction, that the 20 and 100-day simple moving averages will move lower and pressure the rate to fall to the support cluster below. As now it has found the required support, the currency exchange rate is most likely to move back upwards to the two SMAs.

Traders' Sentiment
SWFX traders remain bearish on the pair, as 59% of open positions are short on Wednesday. In the meantime, pending commands are 56% to sell.

 

[KristinaDC]

GBP/USD attempts to reclaim 1.31

"We remain broadly bearish on the GBP, anticipating further BOE easing in the months ahead and anticipating that direct investment and portfolio flows will be insufficient to easily fund the UK current account deficit in the near term."
- BNP Paribas (based on PoundSterlingLive)

Pair's Outlook
The Sterling experienced another leg down on Tuesday, falling under 1.31 major level. Nevertheless, technical indicators retain bullish signals today, which implies that the US jobs data today could disappoint, causing the US Dollar to weaken. As a result, the British Pound would climb back over the 1.31 mark, meeting resistance only at 1.3160, represented by the weekly and the monthly PPs. However, despite bullish studies, risks of the Cable experiencing a fifth consecutive loss exist, in which case even the 1.30 psychological level could be put to the test.

Traders' Sentiment
There are currently 52% of traders holding short positions (previously 53%). At the same time, 52% of all pending orders are to purchase the British currency, compared to 48% on Tuesday.

 

[KristinaDC]

USD/JPY on the edge of breaking eight-month down-trend

"If higher numbers come out (on the jobs report) and we get another strong reading, that could automatically boost odds of a September rate hike."
- SVB Asset Management (based on Reuters)

Pair's Outlook
The Greenback managed to appreciate against the Japanese Yen yesterday, with trade closing in front of the 113.00 major level—right in the middle of the immediate resistance cluster. With the anticipation of the US ADP Employment Change data today, the Buck is also expected to post more gains. However, the bullish development is likely to be limited by approximately 60 pips, as a surge higher would imply a breach of the eight-month descending channel's resistance line. Consequently, the USD/JPY currency pair could make a U-turn when touching this down-trend, retreating back to 102.00. Meanwhile, technical indicators are unable to confirm either scenario.

Traders' Sentiment
Bullish sentiment barely changed, as 66% of all open positions are long (down from 67%). The share of buy orders increased from 63 to 67%.

 

[KristinaDC]

Gold falls below 1,310 on Tuesday

"Gold is headed for the first monthly decline since May as investors price in the prospect of higher U.S. borrowing costs by the end of the year and slowing purchases of bullion-backed exchange-traded funds."
– based on Bloomberg

Pair's Outlook
The yellow metal is slightly recovering on Wednesday, as it plunged and reached below the 1,310 level on Tuesday. However, the combined support provided by the weekly S1 at 1,310.87 and the lower Bollinger band at 1,306.82 somehow managed to slow down the fall of the commodity price. On Wednesday morning the rate started the session at 1,311, which is above the weekly S1 and just below the monthly S1 at 1,315.53, and the rate had been bouncing between the two of them the whole morning. Due to that and other technical factors, the bullion will continue to trade almost flat for the rest of the day.

Traders' Sentiment
Traders have become almost neutral on the metal on Wednesday, as pending commands are 52% to buy, and SWFX trader open positions are 52% short.

 

[Anastasia DC]

EUR/USD almost flat at 1.1150 on Thursday morning

"Europe has seen a rise in nationalism and populism that we think could draw into question the whole euro zone project."
- Michael Hasenstab, Franklin Templeton, (based on Reuters)

Pair's Outlook
The common European currency moved slightly lower on Thursday morning against the US Dollar, as the currency exchange rate still does not manage to find enough support in the cluster below it to rebound. Previously, on Wednesday the currency pair started the day's trading session in the middle of the cluster and fluctuated amidst it until it ended the session at 1.1157, which is just above the 55-day SMA. Due to the combined strength of the support cluster, it is clear that the rate will most likely rebound against it and move to the newly formed monthly pivot point at 1.1190.

Traders' Sentiment
SWFX trader sentiment remains unchanged on Thursday, as 59% of open positions are short. In the meantime, pending commands are 54% to sell the pair.

 

[Anastasia DC]

GBP/USD poised for more gains

"We remain broadly bearish on the GBP, anticipating further BOE easing in the months ahead and anticipating that direct investment and portfolio flows will be insufficient to easily fund the UK current account deficit in the near term."
- BNP Paribas (based on PoundSterlingLive)

Pair's Outlook
The British currency managed to outperform the Greenback on Wednesday, not only retaking the 1.31 level, but also negating Monday's and Tuesday's losses. Gains were limited by the immediate resistance, which could cause the Pound to retreat today. However, technical indicators suggest otherwise, as they retain bullish signals. In case the bullish momentum prevails, the pair could reclaim the 1.32 level. The second closest resistance area is likely to remain out of reach, as there no impetus today is expected to push the Cable beyond 1.3250.

Traders' Sentiment
There are 52% of traders with a negative outlook towards the Sterling, unchanged since yesterday. The share of buy and sell orders barely changed, as they take up 51% and 49% of the market, respectively.

 

[Anastasia DC]

USD/JPY puts the down-trend to the test

"The dollar and Treasury yields had risen in tandem following Jackson Hole last week but that phase came to an end yesterday. The US dollar will not be making much further headway before Friday's non-farm employment report."
- Barclays (based on The Business Times)

Pair's Outlook
The USD/JPY currency pair posted more gains on Wednesday, but they were limited by the eight-month resistance line at 103.55. Consequently, the American Dollar is now likely to undergo a correction, which could cause the given pair to slide back under the 103.00 major level, at least from the technical point of view. Aggregate technical studies, on the other hand, are unable to confirm the possibility of the negative outlook, as they keep giving mixed signals. Furthermore, there is a relatively large number of supports under the 103.00 mark, all having the potential to cause a bullish outburst if some demand is sufficient.

Traders' Sentiment
Bulls retreated again, as 65% of traders hold long positions today (previously 66%). The buy and the sell order ratio is now equal to one.

 

[Anastasia DC]

Gold trades below 1,310 on Thursday

"Gold held last month's decline as investors await U.S. jobs data due Friday for further clues on the timing of an interest rate increase."
– based on Bloomberg

Pair's Outlook
The yellow metal is located between two weekly support levels at 1,310.87 and 1,301.13 without clear direction on Thursday morning. Previously, on Wednesday the metal fluctuated around the first weekly support level at 1,310.87 and ended the day's trading session at 1,307.70. On Thursday morning the bullion had slightly surged, as it continued a rebound from the support cluster located below, which occurred on Wednesday. However, the metal is most likely to bounce off the weekly S1 at 1,310.87 and continue its downward movement in accordance with the channel down pattern, in which it has been for the past nine sessions.

Traders' Sentiment
Traders are neutral bearish on the metal, as 51% of open positions are short. In the meantime, pending commands are 61% to buy.

 

[Anastasia DC]

EUR/USD surges to 1.12 mark

"New orders at euro-area factories rose at the weakest pace in 18 months in August as both domestic and export demand faltered amid heightened uncertainty after the U.K. voted to quit the European Union."
– based on Bloomberg

Pair's Outlook
The common European currency traded at 1.12 against the US Dollar on early Friday morning, as the currency exchange rate surged above the newly formed monthly pivot point at 1.1190. Moreover, this move has confirmed that a channel upward pattern exists, which has been formed since the Brexit. Due to that, it is almost safe to assume, that the currency exchange rate is set to surge in the upcoming month to the 1.14 level. Although, today, the rate will struggle with the 20 and 100-day SMAs, as it is squeezed between them and the monthly PP.

Traders' Sentiment
SWFX traders remain bearish on the pair, as 59% of open positions are short. In the meantime, pending orders are 54% to sell.

 

[Anastasia DC]

GBP/USD trades in murky waters

"We remain broadly bearish on the GBP, anticipating further BOE easing in the months ahead and anticipating that direct investment and portfolio flows will be insufficient to easily fund the UK current account deficit in the near term."
- BNP Paribas (based on PoundSterlingLive)

Pair's Outlook
A strong reading of the UK Manufacturing PMI yesterday allowed the Sterling to take the upper hand versus the US Dollar, with the exchange rate reaching the tough resistance area 1.33. However, the Pound was unable to climb over this major level, but technical indicators suggest that another rally could push the Cable even higher today. The main gauge of such a development would be weak US NFP results later today, with the pair seen as high as 1.34, where the weekly R2 and the monthly R1 are located. Nevertheless, the GBP/USD pair could also retreat back to 1.32 should the NFP come out better than expected.

Traders' Sentiment
Bearish market sentiment returned to its previous Friday's level of 58% (previously 52%). At the same time, the share of purchase orders lost two percentage points. The orders now take up 49% of the market.

 

[Anastasia DC]

USD/JPY: risks skewed to the upside

"Dollar-yen remains supported from Fed expectations underpinning the dollar, and pressure on Kuroda to keep the pedal to the metal on stimulus rhetoric. Position adjustment ahead of tonight's critical non-farm payrolls should dominate today's foreign-exchange landscape."
- Oanda Corp. (based on Bloomberg)

Pair's Outlook
Even though the US Dollar weakened against the Yen on Thursday, the pair still experienced only an 18-pip loss. As a result, the eight-month down-trend received another confirmation and, technically, should trigger another USD/JPY sell-off. However, according to technical studies, that is not going to be the case, as signals suggest a rally. A breach of the immediate resistance cluster, represented by the weekly R2, the down-trend and the Bollinger band, could allow the Buck to retake the 104.00 level, which was also put to the test yesterday. Meanwhile, other data implies that the Greenback is to negate most of this week's gains, most likely ignoring the nearest support.

Traders' Sentiment
There are 66% of traders with a positive outlook towards the US Dollar today, while the number of buy orders slid from 50 to 43%.

 

[Anastasia DC]

Gold falls after a surge on Thursday

"Gold dropped to its lowest in over two months on Thursday, as European shares rose, while investors waited to see if U.S. jobs data could put the Federal Reserve on track to hike interest rates."
– based on Growth Aces

Pair's Outlook
The yellow metal is moving lower on Friday morning, as it opened Friday's trading session at 1,314.61 and started moving lower after a slight bounced above the 1,315 level. Previously, on Thursday the metal began to surge midday and ended the day's trading session above the first weekly support level of 1,310.87, which had provided resistance to the bullion. At the moment, gold faces no real resistance up to the level of 1,326.43, where the monthly PP is located at. Due to that it is possible that the metal will move to the weekly S1 and rebound against it.

Traders' Sentiment
Traders are short on the metal, as 52% of open positions are bearish on Friday. In the meantime, pending commands are 62% to buy the metal.

 

[Anastasia DC]

EUR/USD retreats from 1.12 level on Monday

"I don't rule out that there could be some decisions made that would consolidate a group of countries with equal levels of development and, thereby, in my opinion, strengthening the euro."
–Vladimir Putin (based on Bloomberg)

Pair's Outlook

The common European currency is between two strong clusters against the US Dollar on Monday, as the currency exchange rate previously on Friday retreated from the 1.12 level by the end of day's trading session. However, the resistance from the upside is stronger, as the support cluster, and the daily aggregate technical indicators forecast a fall for the currency exchange rate during today's trading session. Due to that, it is most likely that the Euro will depreciate against the Greenback by the end of Monday's trading.

Traders' Sentiment

SWFX traders remain bearish on the pair, as 60% of open positions are short on Monday. In the meantime, pending commands are 58% to sell the pair.