Daily Technical Analysis for Majors by Dukascopy

[Anastasia DC]

USD/JPY surges for the sixth time in a row

"Positive U.S. data helps the U.S. dollar higher. The hurdle is high for the U.S. data to be meaningful this week. The market feels very unsure of itself after the Bank of Japan and Fed meetings failed to spark a bigger move."
- Saxo Bank A/S (based on Bloomberg)

Pair's Outlook
On Monday the American Dollar managed to outperform the Japanese Yen for the fifth consecutive time, once again approaching the nine-month down-trend. Technically, the USD/JPY currency pair should now undergo a correction and end the day in a red zone, with the immediate support, namely the 20-day SMA, failing to limit the losses. Technical indicators are also in favour of the bearish scenario, but no event today is expected to cause the pair to erase its intraday gains, acquired during the Asian session. At this point the 102.00 major level could be retaken, despite a group of important levels bolstering resistance around it.

Traders' Sentiment
Today 63% of traders hold long positions (previously 62%), whereas 77% of all pending orders are to purchase the Greenback.

 

[Anastasia DC]

Gold falls to 1,310 mark

"Gold prices gained on Tuesday in Asia in think trade with most attention squarely on U.S. jobs data at the end of the week for a better view of chances the U.S. Federal Reserve will hike rates before the end of the year."
– based on investing.com

Pair's Outlook
The yellow metal continued to fall on Tuesday morning, as it went into the seventh consecutive session of losses. However, during the day's session the metal met with a strong support level, as just below the bullion is a line of support, which is formed by connecting the September and August low levels. Moreover, the support is also strengthened by the 100-period SMA at 1,310.31. Although, daily aggregate technical indicators forecast a continuation of the fall, and in such scenario the metal would likely fall to at least the 1,304.78 level, where the first weekly support is located at.

Traders' Sentiment
Traders slightly increased their bullish sentiment, as 54% of open positions are long on Tuesday, compared to previous 53%. In the meantime, pending commands remain bullish, as 65% of set up orders are to buy the metal.

 

[Anastasia DC]

Euro back up on Wednesday

"The euro erased losses after Bloomberg reported the European Central Bank will probably gradually wind down bond purchases before the conclusion of quantitative easing."
- based on Bloomberg

Pair's Outlook
The Euro surged on Wednesday morning against the Greenback, as the currency exchange rate erased the losses of previous sessions and attempted to break the resistance cluster, which pressured it lower before. Previously, on Tuesday the currency pair fell to the 1.1138 level, but it managed to change its direction mid-session and end the day at 1.1203. As in that fall the rate touched the channel up pattern's lower trend line and rebounded, it is most likely that today's surge will continue.

Traders' Sentiment
SWFX traders have increased their bullish positions by one percentage point to 44%, compared to yesterday's 43%. In the meantime, pending commands are also bearish, as 62% of set up orders are to sell.

 

[Anastasia DC]

GBP/USD struggles to remain above 1.27

"Everything people are hearing from the UK is not positive for its currency."
- Pioneer Investments (based on Business Recorder)

Pair's Outlook
For the second day yesterday the British currency weakened significantly more than anticipated, completely breaching the post-Brexit consolidation trend, as even the support cluster around the July low of 1.2798 was unable to limit the losses. According to technical studies the Cable is to continue sliding down today, with the main target being the monthly S2 at 1.2585. On the other hand, a poor reading of US fundamentals today could cause the pair to undergo a correction, possibly even climbing back over the 1.28 level. The base case scenario, however, is another slump towards 1.2650.

Traders' Sentiment
There are 64% of all open positions being long today (previously 63%), whereas the number of orders to purchase the Sterling dropped down from 56 to 47%.

 

[Anastasia DC]

USD/JPY in limbo ahead of ADP data

"The U.S. dollar should continue to outperform but after six straight days of gains, traders should beware of a correction in USD/JPY ahead of Friday's non-farm payrolls report."
- BK Asset Management (based on Reuters)

Pair's Outlook
Some hawkish comments from the Fed caused the Greenback to add more than 120 pips against the Yen yesterday, nearly managing to retake the 103.00 mark. Even though technical indicators are no longer giving bearish signals, a possibility of bears taking over still exists. Nonetheless, a tough support cluster around the 102.00 major level is more than capable of handling any bearish development, while gains could potentially extend towards 103.75, where the monthly R1 coincides with the weekly R3 and the 100-day SMA. Moreover, the 104.00 level also represents significant psychological resistance, which remained intact for more than two months now.

Traders' Sentiment
Although not as strong as yesterday, but market sentiment remains bullish at 60%. The share of buy orders, however, slid from 77 to 64%.

 

[Anastasia DC]

Gold plummets 3.4% on Tuesday

"Gold XAU= plunged 3.3 percent on Tuesday, its biggest tumble since September 2013."
– based on Reuters

Pair's Outlook
The yellow metal edged higher on Wednesday morning and reached a resistance cluster located around the level of 1,275. However, the markets are still amazed at the drastic fall, which occurred in the second half of Tuesday's trading. The bullion fell to the level of 1,266.93 near the end of the day's trading session. This fall is the result of a breakout, which formed in the recent months and could have been seen fully on September 26. Although, it was expected that the breakout will be to the upside and consistent with the long term rising wedge pattern.

Traders' Sentiment
Traders remain bullish on the metal as, 56% of open positions are long. However, set up orders no longer are largely bullish, as 52% of pending commands are to sell the metal.

 

[Anastasia DC]

EUR/USD trades at 1.12 mark on Thursday morning

"A Purchasing Managers' Index for the manufacturing and services sector slid to 52.6 in September from 52.9 in August."
– based on Bloomberg

Pair's Outlook
The common European currency had remained almost unchanged against the US Dollar on Thursday morning, as the currency pair was at 1.12 on early morning. Although, as the rate had tried to surge and was stopped by the 20-day SMA, it had moved lower than the opening price of 1.1204. Previously, the currency exchange rate bounced between the levels of 1.1233 and 1.1189, which is consistent with a channel down pattern, in accordance with which the pair has been trading since September 25. It is most likely that the pair will continue to bounce between the channel's borders.

Traders' Sentiment
Trader sentiment remains unchanged, as 56% of open positions are short. In the meantime, pending commands are 61% to sell the pair.

 

[Anastasia DC]

GBP/USD attempts to remain above 1.27

"To get Sterling below 1.20 we need the market to price much more Fed hiking, or the UK economy to be in poor enough shape that these simple rate/FX correlations break down. For now, our base case is still for a low of GBP/USD 1.23 in March."
- Societe Generale (based on PoundSterlingLive)

Pair's Outlook
A rather weak reading of ADP data yesterday caused the GBP/USD currency pair to erase all intraday losses and even inch slightly higher. As a result, the Cable managed to remain above the 1.27 major level and is now expected to edge higher for the second day. Even though technical indicators are unable to confirm the possibility of a rally, USD-pairs tend to turn in favour of other currencies ahead of NFP data, rather than the US Dollar itself. On the other hand, the Cable has little room for further appreciation, being that the nearest resistance rests only 30 pips above today's opening price. Consequently, risks of the exchange rate falling under 1.27 also persist.

Traders' Sentiment
Bulls now take up 65% of the market (previously 64%), while the share of buy orders returned to its Monday's level of 52%.

 

[Anastasia DC]

USD/JPY to undergo a correction

"But I think most did not expect that uptrend in dollar/yen, because there are no materials on which to sell the yen further and buy the dollar. Most people would like to check Friday's employment data."
- Masashi Murata, BBH (based on Reuters)

Pair's Outlook
Despite poor ADP data on Wednesday, the US Dollar still managed to outperform the Japanese Yen, with the immediate resistance cluster limiting the gains. However, the USD/JPY pair is now likely to weaken, amid the supply area around 103.75 being too difficult to breach. Moreover, there is no impetus present today, which would be sufficient for a surge beyond the nearest resistance, thus, a slight downside correction is the most probably outcome. A drop back under 103.00 is also doubtful, but in case bears do trigger such a sharp decline, the weekly R2 at 102.84 is to limit the losses. Meanwhile, technical studies are unable to confirm the outlook, as they are giving mixed signals.

Traders' Sentiment
Today 58% of all open positions are long, compared to 60% on Wednesday. The number of sell orders increased from 36 to 53%.

 

[Trader Dale]

thare has been a strong buying activity on eur/usd caused by the ECB news that were demented later on. I think that the markets will go down again to test this activity. I think that logical levels for intraday long trades would be 1.1159 and 1.1147. What do you think?

 

[Anastasia DC]

Gold in another session of losses

"Gold edged higher on early Thursday as bargain hunters stepped in to buy after the metal hit fresh three-month lows in the previous session, ahead of Friday's nonfarm payrolls report."
– based on Reuters

Pair's Outlook
The yellow metal continued to lose value on Thursday morning, as the metal had moved to the 1,365 level. Previously, the bullion attempted to break through the resistance put up by the weekly S3 and the monthly S2, which are located respectively at 1,275.89 and 1,273.23. Gold is most likely to continue to move lower. However, at 1,258.70 the 200-day SMA is approaching from the downside and is most likely to slow down the fall of the bullion.

Traders' Sentiment
Traders of the SWFX are long on the metal, as 55% of open positions are bullish. In the meantime, pending commands have shifted and are once more bullish with 56% of them to buy the metal.

 

[Anastasia DC]

EUR/USD almost at 1.11 on Friday morning

"The Euro has dropped back to support at the bottom of a range carved out after the currency topped below the 1.14 figure against the US Dollar."
– Ilya Spivak, Currency Strategist (based on Daily FX)

Pair's Outlook
The common European currency continued to depreciate against the US Dollar on Friday, as the currency exchange rate almost reached the 1.11 mark on early morning. During the early morning hours, the pair bent the lower Bollinger band and passed the first monthly resistance level at 1.1133. However, afterwards the exchange rate stopped and reversed its direction at 1.1110. Although, the next support level is the weekly S2 at 1.1098, and the way to it can be considered as open.

Traders' Sentiment
SWFX traders have slightly decreased their bearish sentiment, as they are slowly nearing neutrality. On Friday 54% of open positions are short, compared to 56% on Thursday. In the meantime, pending commands have become more evidently bearish, as 68% of set up orders are to buy, compared to 61% on Thursday.

 

[Anastasia DC]

GBP/USD dives on harsh ‘Brexit' expectations

"The whole thing's been on a precipice since Sunday, since Theresa May (pointed to) March Brexit negotiations, but the selling has been very substantial so you can only think its been part of that general punishment of the pound for Brexit."
- Westpac (based on Reuters)

Pair's Outlook
The Cable failed to remain above the 1.27 level yesterday, having slumped to 1.26, finding support only at the monthly S2. Nevertheless, early during the Asian today all supports crumbled, causing the Pound to drop to 1.1950 dollars. The sell-off was triggered by growing fears that ‘Brexit' will have a much harder impact on the UK's economy than first anticipated. Eventually the pair managed to climb back above 1.24, but it is uncertain now whether the monthly S3 will hold through the day. Today's US NFP data could help the Pound even reclaim 1.25 if the British currency refrains from falling deeper down until then.

Traders' Sentiment
There are 62% of traders with a positive outlook towards the Sterling, compared to 65% yesterday. Meanwhile, the share of buy orders edged down from 52 to 44% over the past 24 hours.

 

[Anastasia DC]

USD/JPY trades flat ahead of NFP figures

"A strong U.S. September non-farm payrolls report will raise odds of a December Fed funds rate hike and push the dollar higher. As the economy is near full employment, the pace of wage growth will have more market impact than the pace of job gains."
- Commonwealth Bank of Australia (based on Bloomberg)

Pair's Outlook
The US Dollar outperformed the Japanese Yen for the eight consecutive time yesterday, successfully breaching the tough resistance area in front of the 104.00 major level. This opens the door for another rally, which would imply the USD/JPY closing above the 104.00 mark, thus, establishing a fresh two-month high. However, the upcoming payrolls data could turn the tide for the Greenback, causing it to fall back under 103.50, with the next support located only at 102.84, represented by the weekly R2. Meanwhile, technical studies retain mixed signals, unable to confirm either scenario.

Traders' Sentiment
Bullish market sentiment keeps fading, as 56% of all open positions are now long, compared to 58% yesterday. At the same time, the number of orders to purchase the US currency increased from 47 to 56%.

 

[Anastasia DC]

Gold marks tenth consecutive session of losses

"A strategic buying opportunity may open up in gold should prices drop substantially below $1,250 an ounce."
– Goldman Sachs (based on Bloomberg)

Pair's Outlook
The yellow metal continued its way down on Thursday, as if there are no support levels, which could affect it. However, that is now almost the truth, as the only significant level of support left is the third monthly support at 1,244.01. The metal's fall has been so drastic, that almost all patterns have been broken and analysts are concentrating more on the fundamentals. However, the 1,250 mark provides a psychological level of significance, and it might stop the drop, as it already did manage to slow it down during Thursday's trading session.

Traders' Sentiment
SWFX trader sentiment has remained unchanged since yesterday, as 55% of open positions are long. In the meantime, pending commands are identical to open positions, namely 55% of them are to buy.

 

[Anastasia DC]

EUR/USD near 1.12 on Monday morning

"Our inflation rate will pick up during the course of 2017, and then will continue moving in 2018 toward the objective which is close but below 2 percent."
– Mario Draghi (based on Bloomberg)

Pair's Outlook
The common European currency is surging amidst two levels of significance against the US Dollar, as the currency exchange rate approaches the 55-day simple moving average at 1.1197. Previously, the pair fell to the 1.11 level during Friday's trading session. However, there the rate found support and began a surge, which resulted in an almost 50 pip gain by the end of the session. As the rate had rebounded against a descending channel's lower trend line, it is most likely that the currency rate is now set to surge to the 1.1250 level in the near future.

Traders' Sentiment
SWFX traders remain bearish, as 55% of open positions were short on Monday morning. In the meantime, pending commands are close to neutral, as 52% of set up orders are to sell.

 

[Anastasia DC]

GBP/USD risks falling under 1.24

"The combination of collapsing currency and concerns about fading monetary support for the UK asset markets could stoke fears about a balance of payment crisis and a disorderly selloff in the pound."
- Credit Agricole (based on Business Recorder)

Pair's Outlook
On Friday the Sterling failed to reclaim the 1.25 major level, but also managed to remain above the 1.24 level, despite the initial hard slump. However, risks are still skewed to the downside, with the Cable facing a relatively strong resistance area around 1.2460, represented by the weekly PP and the Bollinger band. This supply area could trigger more weakness, causing the GBP/USD pair to pierce the 1.24 level. Meanwhile, the nearest support lies only at 1.2254, namely the monthly S3, but a drop that low is unlikely, as technical indicators retain mixed signals and no driver that could cause such a slump is present today.

Traders' Sentiment
Bullish traders' sentiment returned to previous Monday's level of 61%, while the share of sell orders edged up from 56 to 65%.

 

[Anastasia DC]

USD/JPY risks falling back under 103.00

"The risk of a short-term top has increased considerably and unless USD can move and stay above 103.80 within these 1 to 2 days, a break below 102.70 would not be surprising."
- UOB (based on FXStreet)

Pair's Outlook
The bearish scenario prevailed on Friday, as the USD/JPY currency pair not only dropped under the anticipated 103.50 level, but even returned under the 103.00 mark. The US Dollar, however, opened with a small bullish gap today, but even this is insufficient to be certain of today's bullish outcome. Another sign is the technical indicators, they are now giving bullish signals, also suggesting the pair is to edge higher. On the other hand, a tough resistance cluster rests around 103.75, which is likely to limit any possible gains. Having opened above 103.00 level, the Buck could still decline, as the nearest support is located only at 102.78.

Traders' Sentiment
There are still 58% of traders being long today, compared to 56% on Friday. At the same time, the number of sell orders increased from 44 to 55%.

 

[Anastasia DC]

Gold finds support near 1,250

"Gold rose early Monday, after marking a four-month low in the prior session, supported by an easing dollar."
– based on Reuters

Pair's Outlook
The yellow metal surged on Monday morning, as the commodity previously found support near the 1,250 level. However, during Friday's trading session the bullion fell and reached the 1,241.30 level before it rebounded. On early Monday morning the metal faced no resistance up to the level of 1,272.39, where the weekly PP is located at. Moreover, at 1,273.23 the monthly S2 is providing additional resistance. However, daily technical indicators forecast a fall of the previous metal by the end of the day.

Traders' Sentiment
Traders remain bullish on the metal, as 56% of open positions are long on Monday. In the meantime, pending commands are 60% long.

 

[Anastasia DC]

EUR/USD once more touches lower trend line

"The Euro itself isn't driving its own performance! Aside from Brexit, traders are focused on: how incoming US economic data will shift Fed rate hike expectations for December."
– Christopher Vecchio, currency strategist (based on Daily FX)

Pair's Outlook
The common European currency slightly fell against the US Dollar on Tuesday morning, as the currency exchange rate moved lower and touched the channel down pattern's lower trend line at 1.1121. Moreover, the trend line is also supported by the first weekly support level at 1.1121 and the lower Bollinger band at 1.1118. This is the third time that the currency exchange rate touches the trend line. It is most likely that the pair is set to soon rebound and begin a medium term surge up to the pattern's resistance line.

Traders' Sentiment
SWFX trader sentiment and pending orders are identical, as both of them are 53% bearish.