Daily Technical Analysis for Majors by Dukascopy

[Anastasia DC]

Dear traders, we are happy to present you the Daily [URL deleted]Technical Analysis for Majors by Dukascopy Bank. Here you will find the latest insights on EUR/USD, GBP/USD, USD/JPY and [URL deleted]XAU/USD. We hope you enjoy our analyses and find them handy in managing your trades!
Your comments and feedback are very welcome.

 

[Anastasia DC]

EUR/USD surges on US data on Friday

"I am still on the side that the U.S. economy is better than these data look, but it is also the case that the Fed has less confidence than I do and the market is unlikely to turn around unless there is a major piece of data that surprises on the upside."
- Citigroup (based on Reuters)

Pair's Outlook
The European currency appreciated in moment's notice against the Greenback, as US Non-Farm Employment Change data was published. Since the employment was expected by various experts to increase by around 160,000, but turned out to be a 38,000 change, the Euro surged from 1.1150 to 1.1367 at the end of day's trading session. In addition it has not rebounded on Monday and is trading around the monthly S2 at 1.1342, which indicates at possible continuation of appreciation of the currency pair.

Traders' Sentiment
Traders are bearish on the EUR/USD pair, as 54% have opened short positions. In the meantime, pending orders in the 50-pip range are 58% short and 53% short in the 100-pip range.

 

[Anastasia DC]

GBP/USD to retest the up-trend

"GBP is likely to become exclusively poll-driven in coming weeks, if it isn't already, our best guess is that the Brexit/uncertainty premium puts GBP fair value nearer 1.40-1.42 where it's worth a buy."
- Westpac Institutional Bank (based on PoundSterlingLive)

Pair's Outlook
Amid devastating US NFP data on Friday, the GBP/USD currency pair soared, reconfirming the three-month up-trend. Nevertheless, the Cable opened with a bearish gap today and with the bearish momentum taking the upper hand, as the ‘Brexit' fear is back. Technically, the exchange rate should find support around the 1.44 major level, where the 55-day SMA coincides with the earlier-mentioned up-trend. Meanwhile, technical studies are giving mixed signals, suggesting that a close beyond the immediate support cluster is doubtful, despite volatility stretching further.

Traders' Sentiment
Market sentiment remains unchanged at 54% since Friday, whereas the portion of orders to acquire the British currency added 18 percentage points, having risen up to a total of 67%.

 

[Anastasia DC]

USD/JPY takes a shot at 107.00

"What we've found is jawboning is coming from officials when the dollar comes closer to ¥105."
- A senior dealer at a Japanese bank (based on Market Watch)

Pair's Outlook
Friday was an extremely unfortunate day for the USD/JPY, being that the pair dropped more than 200 pips, reaching the lowest level in five weeks. Technical indicators now imply that the bullish momentum is likely to prevail, which would mean a breach of the 38.20% Fibonacci retracement level, located at 106.65. In this case the second target will be the cluster circa 107.10, represented by the Monthly S1 and the Bollinger band. Nevertheless, the US Dollar has the potential to reach even the 107.60 level, but the base case scenario is still a close under the 107.00 mark.

Traders' Sentiment
A rather large portion of bulls remains dominant in the market, namely 74% (previously 75%). Meanwhile, the number of orders to acquire the Greenback edged up from 63 to 73%.

 

[Anastasia DC]

Gold regains losses as US Dollar falls on Friday

"Today we gap open at that weak employment number. You're into resistance at the 50-day moving average, To sum it up, job's pain is gold's gain."
- Rich Ross, Evercore ISI technical analyst (based on CNBC)

Pair's Outlook
The Yellow metal bounced back to the level of May 23, as the Greenback lost its strength against all other currencies and commodities. Main reason for the surge were the US Non-Farm Payrolls, which were published as an increase of 38,000 and fell short the forecasted 160,000. With it the bullion gained 2.7% from 1,210.35 to 1,243.85. However, at the moment it is trading at 1,242.17 which is just below the 55-day simple moving average at 1.244.12 and below the monthly PP at 1,239.18. Further gains for the gold are unlikely, as the price correction has already ended and the metal is slowly continuing its previous course.

Traders' Sentiment
Traders became neutral on the bullion with 50% of all open positions being long. Previously long positions had reached 55%, which means that the 5% decrease might be bulls taking in profits from Friday.

 

[Anastasia DC]

EUR/USD remains unchanged on Monday at 1.1353

"If incoming data are consistent with labor market conditions strengthening and inflation making progress toward our 2 percent objective as I expect, further gradual increases in the Federal Funds Rate are likely to be appropriate."
- Janet Yellen, Federal Reserve (based on Investing.com)

Pair's Outlook
The Euro was volatile against the US Dollar yesterday moving in a range from 1.1326 to 1.1393. However, the currency exchange rate ended day's trading session exactly where it started at 1.1353. At the moment the currency pair has went up a little bit and is trading at 1.1356. The EUR/USD pair is located above the weekly and monthly pivot points around 1.1280, which it would face if it depreciates. In addition, the 55-day SMA is providing support at 1.1305. In the meantime, in case of the European currencies appreciation against the Greenback it could move freely until the first weekly and monthly resistances at around 1.1465.

Traders' Sentiment
Traders continue to slowly become more bearish on the pair, as 55% have already opened short positions compared to yesterday's 54%. Long orders in the 100-pip range have increased by 2% up to 49%.

 

[Anastasia DC]

XAU/USD continues gaining on Monday

"Yellen has been a catalyst for a lot of movement in gold. People are wondering how is she going to raise rates when things aren't really going so hot."
- T&K Futures & Options (based on Bloomberg)

Pair's Outlook
After US Non-Farm Employment data sent gold drastically up from 1,210.49 to 1,243.86, the bullion did not rebound and continued surging on Monday passing the 55-day SMA at 1,244.09. At the moment, the yellow metal has lost a little of its value and is trading at 1,243.73 per ounce. In the meantime, since it had passed the 55-day SMA, it could move up to the first weekly resistance at 1,259.11. However, if the metal keeps struggling with the simple moving average and falls, then a move to the monthly pivot points at 1,239.18 is most likely. Technical indicators are predicting a downfall for gold today.

Traders' Sentiment
Traders have come out of the neutral zone and became slightly bullish on gold, as 51% of open positions are long.

 

[Anastasia DC]

GBP/USD attempts to climb over 1.45

"While I would expect more downside if the polls continue to show the ‘Leave' campaign gathering momentum, the pound is likely to be very volatile in both directions over the next couple of weeks."
- OANDA (based on Market Watch)

Pair's Outlook
The Sterling succeeded in preserving the ascending channel's support line yesterday, having closed with only a 31-pip slump. Nevertheless, there has been a more than 200-pip spike in the GBP/USD pair earlier today, being driven by unknown circumstances. This surge provides a great selling opportunity, thus, the bearish momentum could soon prevail. The Cable still faces a strong resistance cluster around 1.4535, formed by the 20-day SMA, the weekly and the monthly PPs. From below the channel's trend-line is providing support along with the 55-day SMA, a breach of which today is unlikely to occur.

Traders' Sentiment
For the third time in a row market sentiment remains bullish at 54%. At the same time, the portion of orders to purchase the British currency edged lower from 67 to 45%.

 

[Anastasia DC]

USD/JPY sets eye on 108.00

"Dollar/yen should trade in a 105-110 yen range while the euro will be in a $1.10-$1.15 range."
- Nomura (based on Business Recorder)

Pair's Outlook
Yellen rather hawkish speech provided support for the US Dollar on Monday, prompting the USD/JPY currency pair to undergo a bullish correction of 95 pips. The Buck is likely to retain its post-Yellen strength and continue appreciating today, with the closest resistance located beyond the 108.00 mark, represented by the weekly pivot point. At the same time, in case of any weakness the monthly S1 and the Bollinger band are to form provide sufficient support around 107.05 to limit the losses. Technical indicators, however, are still giving bullish signals, bolstering the possibility of the positive outcome today.

Traders' Sentiment
Sentiment keeps weakening, but remains bullish for now, with 72% of traders being long the Buck. Meanwhile, the number of sell orders increased dramatically, namely from 27 to 73%.

 

[Anastasia DC]

EUR/USD appreciates steadily on Tuesday

"Fluctuations in the price of crude oil continue to present a risk, particularly for the price projection, but on the whole appear balanced, as do the risks to economic growth."
- Bundesbank President Jens Weidmann (based on CNBC)

Pair's Outlook
The European currency gained strength against the US Dollar on Tuesday, as it appreciated from 1.1355 to 1.1374. In addition, the movement north of the pair happened steadily without much volatility and favouring the more conservative bulls. At the moment the currency exchange rate is located between the monthly PP at 1.1282 and monthly R1 at 1.1466. Moreover, the monthly PP and R1 are supported by the weekly PP and R1 respectively at 1.1279 and 1.1463. If the pair continues its movement upward it will also face the upper Bollinger band at 1.1452.

Traders' Sentiment
SWFX traders became even more bearish on the pair, as already 56% of open positions are short. Pending orders in the 50 and 100-pip range are respectively 52% and 51% bearish.

 

[Anastasia DC]

GBP/USD muted during early trade

"While I would expect more downside if the polls continue to show the ‘Leave' campaign gathering momentum, the pound is likely to be very volatile in both directions over the next couple of weeks."
- OANDA (based on Market Watch)

Pair's Outlook
With another substantial jump, the Cable was able to retake the 1.45 major level yesterday and even climb over the tough resistance around 1.4535. The same cluster now acts as the nearest support, but a lot weaker than the ascending channel's support line, which is located at 1.4421, also remaining bolstered by the 55-day SMA. Even though the medium-term bias is bullish, the Sterling could still weaken and put the trend-line to another test. Demand, represented by the immediate support cluster might also be sufficient to cause the GBP/USD currency pair to prolong its recovery, allowing it to climb at least 50 pips, until the 1.46 level is reached.

Traders' Sentiment
Bulls grew stronger over the day, as 58% of traders are now long the Pound (previously 54%). The share of sell orders slid from 55 to 51%.

 

[Anastasia DC]

USD/JPY poised for more weakness

"A June U.S. rate hike is now out of the question and the focus is whether the Fed provides any hints of a July hike. There are no major U.S. indicators until the Fed's policy meeting next week, and the dollar is likely to remain bearish until then."
- IG Securities (based on Reuters)

Pair's Outlook
The USD/JPY pair was rather subdued on Tuesday, as it experienced only a slight downside reaction over the day, without reaching any significant technical level. However, a stronger-than-expected Japanese GDP figure earlier today boosted the Yen, causing the pair to drop below the 107.00 mark. The support cluster around this area, represented by the Bollinger band, the monthly S1 and the 38.20% Fibonacci retracement is unlikely to let the exchange rate to keep falling. A full recovery from its intraday low would not be a surprise, however, technical indicators turned from bullish to mixed, meaning that the bearish outcome is more probable.

Traders' Sentiment
Today 73% of all open positions are long (previously 72%), while the sell orders are outnumbering the buy ones by only two percentage points.

 

[Anastasia DC]

Gold surges to 1,249 on Tuesday

"That's [Janet Yellen dropping her 'coming months' promise] good news for gold, which has recently been under downward pressure due to Yellen's hawkish stance and the elevated odds of an interest rate hike in June or July."
- Sunshine Profits (based on Investing.com)

Pair's Outlook
The bullion broke the resistance put up by 55-day simple moving average at 1,244.60 and booked gains on Tuesday. The yellow metal started day's trading at 1,243.85 and touched the 1,249.15 level. At the moment, gold is trading at 1,248.34 against the US Dollar. In the meantime, the metal faces no resistance up to the level of 1,259.11, where the weekly R1 is located. On the other hand, the bullion might fall and reach the monthly PP at 1,239.18. In addition, the aggregate technical indicators support a downward move, as they forecast a fall for gold today.

Traders' Sentiment
SWFX traders have shifted their positions and have become slightly bearish with 51% of open positions being short.

 

[Anastasia DC]

EUR/USD passes 1.14 level on Wednesday

"Forget four rate hikes this year - markets are barely pricing in one rate hike by December. And so, we find the US Dollar lower."
- Christopher Vecchio, Daily FX

Pair's Outlook
The Euro continued appreciating against the US Dollar on Wednesday, as the Greenback lost strength due to the fact that a Federal Reserve rate hike is becoming more and more unlikely. The pair jumped last Thursday on disappointing US non-farm payrolls data and gained strength since then. At the moment the currency exchange rate is at 1.4062 and it is moving north to the cluster of resistances around 1.1460 where the weekly and monthly first resistances and the upper Bollinger band are located. However, aggregate technical indicators forecast no changes for the pair today.

Traders' Sentiment
SWFX traders have not changed their positions since yesterday, as 56% still have open short positions. In the meantime, pending short orders in the 100-pip range have increased from 51% to 54%.

 

[Anastasia DC]

GBP/USD attempts to maintain trade above 1.46

"In our view, the timing of the next Fed rate hike will depend on the economy continuing to progress, the labour market strengthening further and inflation moving back towards it 2 percent target."
- SEB (based on Business Recorder)

Pair's Outlook
The British Pound traded in a rather tight range between the 1.45 and the 1.46 major levels on Wednesday, but with the bearish bias prevailing. The closest resistance area is represented by the 20-day SMA, the weekly and the monthly PPs, however, is unlikely to limit the Cable's movements, as it failed to do so previously. The Sterling remains under the risk of falling towards the ascending channel's support line at 1.4430, unless the interim demand in face of the 1.46 psychological level triggers a rally. In this case the 1.46 will still be the main target, but technical indicators are unable to confirm either scenario.

Traders' Sentiment
Market sentiment weakened over the day, as only 52% of all open positions are now long, compared to 58% on Wednesday.

 

[Anastasia DC]

USD/JPY remains on the back foot

"Until the U.S. economy can make the case for a rate rise, the dollar will be at risk of slipping further."
- Western Union Co. (based on Bloomberg)

Pair's Outlook
As was anticipated, the USD/JPY currency pair failed to fall beyond the 38.20% Fibo yesterday, but closed still just under the 107.00 mark. Consequently, more bearish momentum is likely to follow, with the 38.20% Fibo at 106.65 to be put the test. The lower Bollinger band is bolstering that support, also suggesting that the exchange rate could drop even beyond 106.50. Meanwhile, technical indicators are also in favour of the negative outcome, as they are giving bearish signals both in the daily and the weekly timeframes, implying that all Monday's gains are to be erased by week's end.

Traders' Sentiment
There are three quarters (75%) of traders holding long positions today (previously 73%). At the same time, the number of orders to purchase the US Dollar in the 100-pip range edged higher from 49 to 65%.

 

[Anastasia DC]

Gold above 1,260, as the Greenback weakens

"Federal Reserve Chair Janet Yellen's comments earlier this week have restored a positive outlook for the yellow metal, which was trading under pressure following hawkish comments from the Federal Reserve last month."
- Andy Parker, Market Exclusive

Pair's Outlook
The bullion passed the 1,260 price on Tuesday and did not give up its position, as it gained even more strength against the US Dollar on Wednesday. At the moment the yellow metal is close to the 1,262 mark and it was volatile for the first part of Thursdays trading, at one point even passing the 1,266 level. On its way up gold faces the second weekly resistance at 1,274.37 and close by is located the first monthly resistance at 1,278.62. In the meantime, it is supported by weekly R1 at 1,259.11, which could prevent it from losing its Tuesday's gains.

Traders' Sentiment
SWFX traders have not changed their sentiment since yesterday, as 51% of positions are still short.

 

[Anastasia DC]

EUR/USD retreats from 1.14 level on Thursday

"Since the beginning of the month we've seen broad-based gains in the U.S. dollar, but as the greenback continued to fall and investors adjusted expectations for Fed tightening, currency traders have been yearning for a turn -- and that's exactly what we saw on Thursday."
- BK Asset Management (based on Investing.com)

Pair's Outlook
After the Euro scored gains against the US Dollar and passed the 1.14 level on Wednesday, the pair retreated on Thursday and fell to 1.13. Main reason for the depreciation of the European currency was Mario Draghi's gloomy warnings of EU being at lasting economic damage risk. However, some profit takers might have affected the currency exchange rate also, as many took out profits, as the pair had surged since last Friday's US non-farm payrolls data release, which made the Euro spike against the Greenback. At the moment, the pair has just passed the 55-day SMA and it is moving towards the monthly and weekly pivot points around 1.1280.

Traders' Sentiment
SWFX traders have become less bearish, as open short positions have decreased to 54% from yesterday's 56%.

 

[Anastasia DC]

GBP/USD struggles to preserve the ascending channel pattern

"We stay of the view that the pound will continue to trade within this year's trading range. While elevated short positioning should prevent the currency from depreciating more considerably ... uncertainty as when it comes to the possibility of a Brexit should keep demand for the currency low."
- Credit Agricole (based on Reuters)

Pair's Outlook
With experiencing another decline on Thursday, the GBP/USD currency pair inched closer to the ascending channel's support line. Technically, we should still see a rebound, as the trend-line is reinforced by the 55-day SMA and managed to provide the Cable with sufficient bullish momentum to keep advancing since March. However, daily technical studies are now giving bearish signals, indicating that a breakout might be imminent.. On the other hand, the two-year down-trend has not yet been retested, thus, the immediate support might hold today and eventually cause the Sterling to rebound, leading it back towards the 1.47 major level.

Traders' Sentiment
There are 56% of traders holding long positions today (previously 52%), while the number of purchase orders increased from 32 to 57%.

 

[Anastasia DC]

EUR/USD drops to 1.125 on Friday

"I expect two themes for the week ahead. The first few days will be all about the Fed and any hints about the pace of rate increases."
- Jeff Miller, CEO of NewArc Investments, Inc. (based on Investing.com)

Pair's Outlook
The Euro depreciated against the US Dollar on Thursday and Friday falling to the level of 1.125, which is almost halfway down to the level of 1.115, at which the currency exchange rate was before the disappointing US non-farm payrolls numbers came out and sent the pair upwards. On Monday morning the Euro has appreciated a little bit against the Greenback. However, strong resistance is provided by the monthly PP at 1.1282 and the 20-day SMA at 1.1271. In case the pair moves south, it faces the 100-day SMA at 1.1212.

Traders' Sentiment
SWFX traders are still bearish on the currency pair, as 53% of open positions are short. In the meantime, pending orders are bullish, as in the 50-pip range 66% and in the 100-pip range 65% of orders are long.