Daily Technical Analysis for Majors by Dukascopy

[Anastasia DC]

Gold searches for support

"The potential drivers of increased Chinese physical buying include purchasing gold as a way to hedge for potential currency depreciation in the face of capital controls."
– Jeffrey Currie and Max Layton, Goldman Sachs Group (based on Bloomberg)

Pair's Outlook
The yellow metal struggled to find support on Tuesday morning, as the metal bounced around the weekly pivot point at 1,263.46. Previously, on Monday the bullion moved lower by the end of the day's trading session, and it stopped exactly at the weekly PP at 1,263.46. However, on Tuesday the metal made a slight rebound and moved higher. In the meantime, daily aggregate technical indicators continue to forecast no changes, which means that the metal is most likely set to continue fluctuating between the 200-day SMA and the weekly PP.

Traders' Sentiment
Trader sentiment remains unchanged, as 57% of open positions remain long. In the meantime, pending commands have slightly increased and 57% of set up orders are to buy the metal.

 

[Anastasia DC]

EUR/USD breaks out of deadlock

"We've got a bearish $1.05 forecast by the end of the year, but we expect this to be a gradual grind lower and reliant on the Fed eventually delivering a rate hike and continued European portfolio outflows."
– George Saravelos, Deutsche Bank AG (based on Bloomberg)

Pair's Outlook
Although the bullion remained almost unchanged on Wednesday morning, the yellow metal broke out of the deadlock and became once more volatile by the end of Tuesday's trading. As the commodity price was almost unchanged on Wednesday morning, it had been more volatile to the downside. Moreover, daily aggregate technical indicators forecast a fall of the pair. These factors combined are in favor of a fall of the Euro against the Greenback.

Traders' Sentiment
SWFX traders increased their bullishness after three sessions of stagnation, as on Wednesday 61% of open positions are long, compared to the previous 59%. In the meantime, 60% of pending commands remain set up to sell the Euro.

 

[Anastasia DC]

GBP/USD remains on the back foot

"In coming months, our target for the GBP/USD nonetheless remains for 1.18, especially in the immediate run-up to the activation of Article 50 in March 2017."
- Natixis (based on FXStreet)

Pair's Outlook
Upon reaching the 1.21 level yesterday, the Sterling recovered from most of its intraday losses, resulting in an overall decline of 45-pip. Risks remain skewed to the downside, with the weekly S1 still acting as the main support at 1.2138, but with the 1.21 mark being the absolute bottom floor. Moreover, not event to trigger substantial volatility is present today, thus, the base case scenario is another small decline, sufficient to reach the weekly S1 support. However, we should not rule out the possibility of a the Pound adding a few pips as well, as technical indicators keep giving mixed signals today.

Traders' Sentiment
Market sentiment improved over the day, as 71% of all open positions are currently long (previously 65%). The majority of all pending orders, on the other hand, are to sell the Sterling, namely 64% of them.

 

[Anastasia DC]

Gold breaks resistance on Wednesday

"Economic growth and rising wages are the driving forces behind our expectation for India's gold demand to rise in the long term."
– Sunil Kashyap, chairman, Singapore Bullion Market Association (based on Bullion Vault)

Pair's Outlook
The yellow metal surged on Wednesday morning, as it was ignoring the strength of the US Dollar and broke through two resistance levels and was about to break the last remaining resistance of the cluster. Previously, the metal found support in the weekly PP and attempted to break through the resistance cluster located from 1,269.86 to 1,276.81. Traders should keep their eyes on the 1,276.81 level, where the last resistance is located at, as the further way to 1,287.72 would be open, if the weekly R1 gets broken.

Traders' Sentiment
Traders remain bullish on the metal, as 55% of open positions are long on Wednesday. In the meantime, pending commands are identical to open positions, as 55% of set up orders are to buy the bullion.

 

[Anastasia DC]

EUR/USD trades below Brexit low on Thursday

"The euro is undervalued over the long term. Given what we've seen from price action, movements are largely reflective of the German economy more so than others at this point."
– Bipan Rai, Canadian Imperial Bank of Commerce (based on Bloomberg)

Pair's Outlook
The common European currency fell after it began Thursday's trading just below the Brexit low level of 1.0912 against the US Dollar. Previously, during Wednesday's trading session the currency exchange rate reached not only above the Brexit low level but also reached above the combined resistance put up by the weekly PP at 1.0927 and monthly S3 at 1.0929. Regarding the rest of Thursday's session it is likely that the rate will continue to move lower, however, the signals are mixed, as it might remain unchanged for today.

Traders' Sentiment
SWFX traders remain bullish on the pair, as 60% of open positions are long. In the meantime, pending commands remain bearish, as 58% of trader set up orders are to sell.

 

[Anastasia DC]

GBP/USD struggles to climb higher

"Cable should settle at a new equilibrium. The discounted gloomy UK outlook both prevents a new bold depreciation and a much stronger currency."
- Societe Generale (based on PoundSterlingLive)

Pair's Outlook
Still being backed by BoE Carney's comments, the British currency successfully outperformed the US Dollar on Wednesday. However, the monthly S3 once again prevented the Cable from rising further up, so unless today's fundamentals are in the Pound's favour, the pair is likely to bounce back down. Technical indicators are unable to confirm any scenario today, thus, a decline towards the weekly S1 at 1.2138 is possible. On the other hand, if the monthly S3 gives in, the upside limit is seen around 1.2350, namely between the weekly R1 and the 20-day SMA resistance area.

Traders' Sentiment
Market sentiment remains strongly bullish, with 68% of all open positions being long today (previously 71%). At the same time, the number of orders to sell the Sterling declined from 64 to 58%.

 

[Anastasia DC]

USD/JPY to continue moving upwards

"It seems the dollar-yen trading pair is left out of the loop."
- FX Prime (based on Market Watch)

Pair's Outlook
The Greenback managed to edge higher against the Japanese Yen for the third consecutive day yesterday, therefore, exiting its nearly three-week consolidation trend. As a result, the Buck now has the potential to reach a new three-month high, with the closest obstacle being the 105.10 level, where the weekly R2 and the upper Bollinger band are located. Technical indicators are bolstering the possibility of the bullish outcome, as they keep giving respective signs. Moreover, despite the USD/JPY pair experiencing some stagnation in the past few weeks, since the end of September the overall trend has been clearly bullish, with the trend-line remaining intact.

Traders' Sentiment
Bulls take up only 55% of the market today (previously 56%), while the portion of buy orders slid from 59 to 56% over the day.

 

[Anastasia DC]

Gold fails to break out and remains squeezed in

"Sellers continue to respond to each new high with more selling; indicative of a market seeking out longer-term direction."
– James Stanley, Currency Analyst at Daily FX (based on Daily FX)

Pair's Outlook
The yellow metal once more rebounded and scored minor gains on Thursday morning. Previously, the metal failed to break through the resistance cluster above it, as the weekly R1 turns out to be the strongest level of significance of the cluster, and it stopped the bullion for a second time this week. However, the yellow metal is very slowly moving higher, as the lower boundary of the fluctuations keep moving upward in accordance with an ascending channel pattern. The metal is set to continue fluctuating below the resistance cluster, which begins around 1,272.

Traders' Sentiment
Traders remain bullish on the metal, as 56% of open positions are long on Thursday. Meanwhile, trader set up orders also remain bullish, as 54% of pending commands are to buy.

 

[KristinaDC]

EUR/USD encounters resistance at 1.10

"Monetary policy is supporting growth, but it's not feeding through to the underlying inflation trend. The ECB will be much more focused on that rather than growth data, which is going according to plan."
– Marco Valli, UniCredit SpA (based on Bloomberg)

Pair's Outlook
The common European currency depreciated on Monday morning against the US Dollar, as the currency exchange rate encountered resistance put up by the 20-day simple moving average at 1.10. Previously, on Friday, after experiencing a week of almost no volatility, the pair surged, as it jumped from 1.0894 to 1.0982 during the day's trading session. As the rate has encountered resistance, it is most likely to retreat to the weekly pivot point at 1.0942, where it is most likely to find support.

Traders' Sentiment
Traders remain bullish on the pair, as 57% of open positions remain long. However, trader set up pending commands are short, as 59% of set up orders are to sell.

 

[KristinaDC]

GBP/USD in tight range between 1.2150 and 1.2250

"Politics this month has really taken precedence over the economic data ... sterling appears to be looking ahead into what still is a cloud of political uncertainty."
- Rabobank (based on Business Recorder)

Pair's Outlook
At the end of the previous week the Sterling managed to post mild gains against the US Dollar, but was unable to reclaim the 1.22 major level. The Cable is likely to struggle to overcome this area today as well, despite being supported by the weekly pivot point just under the opening price. At the same time, a relatively strong resistance area rests around 1.2280, which is likely to limit any possible gains today. Moreover, the pair struggled to breach the 1.2250 area through all of the previous week, as well was reluctant to maintain trade below the 1.2150 mark for more than two weeks. With technical indicators retaining mixed signals, the Pound is to remain relatively flat circa 1.22.

Traders' Sentiment
There are still 69% of traders being long the Sterling, whereas 61% of all pending orders are to sell the British currency (previously 65%).

 

[KristinaDC]

EUR/JPY attempts to reclaim 115.00

"The irony is that the euro is falling as core European government-bond yields are rising. This may seem counter-intuitive at first, but any pick-up in bond yields could continue to weigh on the euro as long as it's seen as making the ECB's job of extending QE easier."
- Credit Agricole SA (based on Bloomberg)

Pair's Outlook
Through all of the previous week the European currency has been outperforming the Yen, climbing more than 200 pips higher. Moreover, the ten-month down-trend has been breached last week, thus, creating a possibility for the given cross to return to previous highs. According to technical indicators the Euro is likely to appreciate again today, whilst being supported by a strong cluster around 114.50, making a decline today highly unlikely. Meanwhile, the closest resistance rests only circa 116.00, which the pair will not touch just yet. This area is the next big target, as it will open the door for more bullish potential and allow the Euro to reach the two-year down-trend near 119.00.

Traders' Sentiment
Traders' sentiment remains bullish at 64% (previously 67%). At the same time, the share of sell orders declined from 58 to 51%.

 

[KristinaDC]

NZD/USD in limbo around new weekly pivot point

"Even if the least likely scenario is to happen - Hillary blows it - then we would have to expect risk aversion and the US dollar would see safe-haven flows."
– Nick Tvedt, NZForex (based on New Zealand Herald)

Pair's Outlook
The Kiwi bounced around the newly formed weekly pivot point at 0.7153 against the US Dollar by mid-Monday. Previously, the currency exchange rate found support in the previously broken channel down pattern's lower trend line and surged past the 0.7150 mark to end the day's trading session at 0.7165. However, the pair opened Monday's session at 0.7159 and began to fluctuate in indecision. Moreover, daily aggregate technical indicators forecast no changes in the rate by the end of the session, which is most likely set to occur.

Traders' Sentiment
Traders have come out of the neutral zone and become bullish, as 55% of open positions are long. In the meantime, pending commands are identical, as 55% of trader set up orders are to buy, compared to 47% on Friday.

 

[KristinaDC]

EUR/USD approaches weekly PP on Tuesday

"I don't think the ECB can do a lot more to generate growth."
– Holger Sandte, Nordea Markets (based on Bloomberg)

Pair's Outlook
The Euro slightly depreciated against the US Dollar on Tuesday morning, as the currency exchange rate was slowly heading for the weekly PP, which is located at 1.0942. Previously, on Monday the currency pair did not fluctuate much during the session, as it only slightly moved southwards by almost 12 pips, which could be called as a no move at all. It is most likely that the pair will continue to fall until it reaches the weekly PP at 1.0942, where it is likely to find some support.

Traders' Sentiment
Traders once more have decreased their bullishness, as 55% of open position are long on Tuesday, compared to 57% on Monday. Meanwhile, trader set up orders are bearish, as 58% of set up orders are to sell.

 

[KristinaDC]

GBP/USD to move back to 1.22

"Carney is a respected central banker and overall I'd say that him staying with the BOE until 2019 would be seen as a positive for the country, but again, near term there are so many other factors weighing on the pound."
- Manulife Asset Management (based on Bloomberg)

Pair's Outlook
The British Pound strengthened against the American Dollar on Monday, reaching its trading range's upper border, namely the 1.2250 level. Consequently, a decline is likely to take place today, bouncing back from the 1.2250 mark, since the GBP/USD pair appears to be gravitating towards the 1.22 level. The weekly pivot point still acts as the nearest support, which is to limit intraday losses, but with the 1.2150 being the bottom floor in case of a more bearish outcome. Technical studies are somewhat confirming the outlook, as they keep giving mixed signals in all timeframes, implying that the consolidation trend is to be maintained.

Traders' Sentiment
There are 68% of traders being long the Sterling today (previously 69%), whereas the share of sell orders slid from 61 to 56%.

 

[KristinaDC]

USD/JPY takes another shot at 105.00

"The market is not really responding sensitively to U.S. political events since Friday, so the dollar/yen is stuck ahead of 105."
- Mizuho Securities (based on Reuters)

Pair's Outlook
As was anticipated, the US Dollar outperformed the Yen on Monday, but was unable to climb over the 105.00 major level, despite volatility stretching beyond that area. Nevertheless, the pair managed to preserve the five-week up-trend, thus, more bullish momentum is expected to follow. Meanwhile, technical indicators retain bullish signals, bolstering the possibility of the positive outcome. The Bollinger band keeps providing immediate resistance, now around 105.16, which is likely to be the ceiling for today's gains if the 105.00 level is overcome.

Traders' Sentiment
Bears keep taking over the market, as now 57% of all open positions are short, compared to 55% previously. At the same time, the portion of buy orders added 2% points, rising to a total of 56%.

 

[KristinaDC]

Gold breaks resistance and surges

"Range resistance for the session is found at a price of $1,281.90, and is represented below as the R3 Camarilla pivot."
– Walker England, Daily FX

Pair's Outlook
The yellow metal surged on Tuesday morning, as it jumped from 1,276.34 to 1,279.83 and passed the monthly pivot point at 1,279.01. As the resistance of the pivot point has been broken, the way is free up to the level of 1,285.54, where the first weekly resistance is located. However, the outlook is just like it was yesterday with the exception of the newly calculated monthly PP, which did not provide sufficient resistance to even hinder the surge of the bullion. Gold is most likely to continue the surge during the day.

Traders' Sentiment
Trader sentiment remains unchanged, as 54% of open positions remain bullish. Meanwhile, 59% of set up trader orders are to buy the bullion.

 

[KristinaDC]

EUR/USD continues to gain on Wednesday

"The market has built up some dollar longs and euro shorts in recent weeks, and with Friday's news increasing the uncertainty around the election outcome, we suspect market participants are cutting back."
– Credit Agricole (based on Reuters)

Pair's Outlook
The common European currency appreciated against the US Dollar on Wednesday morning, as it was set to attempt to break the resistance put up by the weekly R2 at 1.1082. Previously, on Tuesday the pair jumped 75 pips or 0.69%. During the surge the rate also broke past three resistance levels, which combined comprise a cluster that now is providing support to the currency exchange rate. The cluster consists of the weekly R1 at 1.1032, monthly PP at 1.1025 and the 20-day SMA at 1.1014.

Traders' Sentiment
Traders are neutral on the pair, as 50% of open positions are long and short. Meanwhile, trader set up orders are bearish, as 56% of pending commands are to sell.

 

[KristinaDC]

GBP/USD to keep gravitating towards 1.22

"Carney is a respected central banker and overall I'd say that him staying with the BOE until 2019 would be seen as a positive for the country, but again, near term there are so many other factors weighing on the pound."
- Manulife Asset Management (based on Bloomberg)

Pair's Outlook
The GBP/USD pair's consolidation trend was preserved yesterday, as the 1.2250 level remained intact. However, the Cable remained completely flat on Tuesday, thus, the outlook is unchanged today, with the Sterling still expected to edge lower. The 20-day SMA and the weekly R1 keep providing immediate resistance just above the 1.2250 mark, whereas the weekly pivot point is the nearest support at 1.2183, also being the main target. At the same time, the 1.2150 level represents the consolidation trend's lower boundary, where demand is likely to be sufficient to trigger a rebound or at least prevent the given pair from sustaining sharper losses.

Traders' Sentiment
There are 66% of traders being long the Pound today (previously 68%), while 59% of all pending orders are to sell the British currency.

 

[KristinaDC]

USD/JPY under selling pressure amid political uncertainty

"The dollar could retake the 105 yen threshold on a Clinton win. Meanwhile 'Trump risk' cannot be ruled out, so I see the pair stuck at current levels for the next week."
- Koji Fukaya, FPG Securities (based on Business Recorder)

Pair's Outlook
Once again the USD/JPY pair failed to reclaim the 105.00 level, which resulted in a rather sharp decline of 66 pips yesterday. Downside volatility on Tuesday was limited by strong demand around 104.00, formed by the weekly S1, monthly PP and 20-day SMA, which are also providing strong support today. Technical studies keep giving bullish signals, but it is uncertain whether the Buck will be able to outperform the Yen. The bottom level today is the 103.40 one, namely the area that kept the pair elevated during the past three weeks. At the same time, hawkish FOMC statement today could cause the Greenback to negate yesterday's losses and approach the 105.00 mark once again.

Traders' Sentiment
Bears keep gaining numbers, as 58% of all open positions are short today (previously 57%). The share of buy orders slid from 56 to 48%.

 

[KristinaDC]

US elections propel gold higher

"Market nerves increased with polls showing a tightening in the U.S. presidential race and ahead of."
– Australia & New Zealand Banking Group Ltd. (based on Bloomberg)

Pair's Outlook
The yellow metal continued to surge on Wednesday's morning, as it broke out of the ascending channel pattern, in which it had been trading since the start of October. The metal's movements most recently have been dictated by the US presidential election pols than rather fundamentals. As the gap between the candidates closes, financial funds flow into safe investments like gold to hedge themselves from the uncertainty and possible fluctuations. However, regarding today, traders can expect the bullion to surge up to the 1,296.73 level, where the next resistance is located at.

Traders' Sentiment
Traders are almost neutral regarding the bullion, as 52% of open positions are long on Wednesday. Meanwhile trader set up pending commands are bullish, as 61% of set up orders are to buy.