Daily Technical Analysis for Majors by Dukascopy

[KristinaDC]

EUR/USD pauses the surge on Friday

"Participants are not responding very much to reports that suggest Clinton is ahead in some battleground states. Emotions has the edge over logic right now."
– Masashi Murata, Brown Brothers Harriman (based on Reuters)

Pair's Outlook
The common European currency stopped appreciating against the US Dollar and moved lower on Friday morning, as the rate previously encountered resistance in the second half of Thursday's trading session. However, the currency rate had already almost reached the support provided by the weekly R2 at 1.1082, and the pair began to rebound. Moreover, the whole slight move to the downside is consistent with the ascending channel pattern, which has been in force for the past eight trading sessions.

Traders' Sentiment
Traders are almost neutral, as 51% of open positions are short. Meanwhile, trader set up orders are short, as 60% of pending commands are to sell.

 

[KristinaDC]

GBP/USD in limbo ahead of US NFP data

"We need to keep the sterling rebound in context. It is more of a corrective bounce than a turn in the trend. Sterling is in a corrective phase but we need to be careful about chasing it too hard in the short term."
- CIBC (based on Business Recorder)

Pair's Outlook
Due to the upbeat UK statement and the High Court's decision yesterday, the British Pound received a solid boost, adding more than 150 pips against the US Dollar. The Cable met resistance only at 1.2472, where there weekly R3 is located and which keeps providing immediate resistance today. Consequently, a corrective decline is quite possible today, but with a rather weak US NFP reading expected, the Sterling has the potential to post more gains and easily reclaim the 1.25 major level. On the other hand, a fall back under 1.24 is possible if bears take over the market. Meanwhile, technical studies are unable to confirm either scenario.

Traders' Sentiment
There are 60% of traders with a positive outlook towards the Pound today (previously 63%). The share of sell orders slid from 58 to 56%.

 

[KristinaDC]

USD/JPY under the risk of plunging further

"The slide in the dollar against ultra-low-yielding currencies such as euro, yen and Swiss franc is evidence of a flight to safety, reversing a period of optimism where the dollar enjoyed the combination of stronger polling results for Clinton and not entirely coincidental positioning for a Fed hike in December."
- Westpac Banking Corp. (based on Bloomberg)

Pair's Outlook
Even though the American Dollar weakened against the Japanese Yen on Thursday, the strong support circa 102.75 managed to limit the losses; however, the 103.00 threshold was still crossed yesterday. Earlier today the USD/JPY pair started a corrective rally after having slumped almost 200 pips this week. The main concern is whether the pair will be able to hold on to these gains or bears are to push the Buck beyond the tough support around 102.75. Apart from political factors the US NFP figures are likely to have the most impact today, the outlook for which is rather poor. Technical indicators cannot confirm either outlook, but we believe risks are skewed to the downside.

Traders' Sentiment
Today 63% of traders are long the US Dollar (previously 61%). At the same time, the portion of buy orders edged down from 57 to 56%.

 

[KristinaDC]

Gold trades below 1,300

"We can now ideally be in for a nice ride into wave 5 towards the 1307 area."
– Gregor Horvat, Elliot Wave Financial Service (based on investing.com)

Pair's Outlook
The yellow metal was in a full on retreat on Friday morning, as it had erased all of Thursday's gains. However, the situation seems only temporary, as the metal is still set to surge, as it is indicated by various factors. First of all, the metal has reached the support provided by the weekly R2 at 1,296.73. Secondly, trader set up orders are mostly long. Third is the fact that daily aggregate technical indicators forecast a surge. Last but not least, the US election is not over and the drama will continue.

Traders' Sentiment
SWFX traders have not changed their mind, as 51% of open positions remain long. Meanwhile, 60% of trader set up orders are to buy.

 

[Anastasia DC]

Euro begins the week lower

"Based on our review, we have not changed our conclusions that we expressed in July with respect to Secretary Clinton."
– James Comey, FBI Director (based on Bloomberg)

Pair's Outlook
The common European currency slightly appreciated against the US Dollar on Monday morning. However, the rate opened the day's trading session a lot lower than the previous close of 1.1138, as Monday's trading began at 1.1063. There is one simple reason for this 75 pip fall. The Director of the FBI once more announced that Hillary Clinton, a candidate for the presidency of the United States, will not be charged with criminal accusations after the recent e-mail review. It is most likely, that the Euro will begin regaining those losses against the Greenback, as it passed the weekly PP during Monday's morning.

Traders' Sentiment
Traders remain slightly bearish on the pair, as 52% of open positions are short on Monday. Meanwhile, 62% of trader set up orders are to sell.

 

[Anastasia DC]

GBP/USD trades in murky waters

"We're seeing a bit of a relief rally now that the worst case scenario of a unilateral 'hard Brexit' has been deferred, and markets can start focusing on other factors (like) the US presidential election."
- CMC (based on Business Recorder)

Pair's Outlook
The British Pound prolonged its rally against the US Dollar on Friday, establishing a new four-week high of 1.2557. Having opened with a relatively small bearish gap today, the Cable slipped back below the 1.25 major level. This suggests that another surge could be far-fetched, even though only the Bollinger band is providing immediate resistance. On the other hand, a strong bearish development is also unlikely, as the weekly and the monthly PPs form a substantial demand area around 1.24. Furthermore, there are no fundamental events that could have a significant impact on the GBP/USD pair today, apart from the US elections. Technical indicators are also giving mixed signals today.

Traders' Sentiment
There are 63% of traders holding long positions today (previously 60%), whereas 60% of all pending orders are to sell the Sterling.

 

[Anastasia DC]

USD/JPY continues to edge higher

"The dollar is being bought back on lessened prospects of a Trump presidency. But so far it is not active buying, as Clinton is likely to maintain a policy that prevents a strong dollar if she is elected, and as economic prospects remain unclear."
- Mizuho Securities (based on Reuters)

Pair's Outlook
The USD/JPY currency pair inched higher on Friday, despite a poor reading of the US NFP, thus, retaking the 103.00 level. Moreover, today the pair opened with a significant bullish gap, amid Clinton leading in the US presidential elections once again. The Greenback is now supported by a strong cluster, represented by the 20-day SMA, the monthly and the weekly PPs around 103.85, which is to prevent the Buck from sliding back down. Consequently, with another rally today the US currency will be close no negating all last week's losses, with the weekly R1 at 104.71 being the main obstacle. Technical studies are unable to confirm the outlook, as they retain mixed signals.

Traders' Sentiment
Although not as strong as on Friday, but market sentiment remains bullish at 62%. The share of buy orders remains unchanged at 56%.

 

[Anastasia DC]

Gold starts the session below 1,300 mark

"We don't think this most recent rally in gold will last."
– Sameer Samana, Wells Fargo Investment Institute (based on Bloomberg)

Pair's Outlook
The yellow metal's price declined on early Monday morning, as the bullion started the session a lot lower than the previous close. The lower opening was caused by the fact that the FBI Director James Comey sent another letter to the congress. This time it was mentioned that the conclusions expressed in July by the FBI have not changed after the latest review. The short version is – Clinton will not be charged by the FBI, ignoring the fact that the guilt of the presidential candidate has been proven.

Traders' Sentiment
Traders have become fully neutral, regarding the yellow metal. Meanwhile, 58% of trader set up orders are to buy the metal.

 

[Anastasia DC]

EUR/USD remains near 1.1050

"Investors boosted bullish bets on the euro against the dollar as they positioned for Tuesday's U.S. presidential election."
– based on Bloomberg

Pair's Outlook
The common European currency slightly fluctuated but did not move anywhere against the US Dollar on Tuesday morning, as the currency exchange rate stayed just below the 1.1050 level. Previously, on Monday the currency pair depreciated, as US politics strengthened the Greenback. Today is the US presidential election, which means that technical analysis might not predict the results, as the rate is in the middle of a larger scale descending channel pattern. Traders will rather look at fundamental analysis of the US politics or stick to their old long term trades.

Traders' Sentiment
SWFX traders are bearish on the pair, as 53% of open positions were short on Tuesday morning. Meanwhile, 60% of trader set up orders are to sell the Euro.

 

[Anastasia DC]

GBP/USD attempts to remain above 1.24

"There has been a positive rise in the risk reversal for GBPUSD across time frames in recent days, this means that the volatility of calls has risen at a faster pace than the volatility of puts, which suggests that the market is betting on a currency rise, or in the case of the pound, a recovery."
- Kathleen Brooks, City Index (based on PoundSterlingLive)

Pair's Outlook
On Monday the British currency weakened against the US Dollar, finding support at the 1.24 major level. Consequently, the Cable is now expected to rebound and make its way towards the 1.25 psychological level, ignoring the immediate supply area. However, uncertainty remains, as technical indicators retain mixed signals in the daily timeframe, whereas US election results could have an unpredictable impact on the pair. Furthermore, last week's breach of the post-Brexit down-trend also suggests that the Sterling is to keep edging higher. The worst case scenario, however, is a slump towards 1.2150 if the Greenback receives a substantial boost from the election results.

Traders' Sentiment
Market sentiment remains bullish at 62% (previously 63%), while the portion of orders to sell the Pound inched down from 60 to 59%.

 

[Anastasia DC]

USD/JPY in limbo ahead of US election

"The dollar is being bought back on lessened prospects of a Trump presidency. But so far it is not active buying, as Clinton is likely to maintain a policy that prevents a strong dollar if she is elected, and as economic prospects remain unclear."
- Mizuho Securities (based on Reuters)

Pair's Outlook
Even though the US Dollar inched higher against the Yen on Monday, the immediate resistance area remained untouched. Today technical indicators suggest the Greenback is to outperform the Japanese currency again, which would also imply a breach of the immediate supply area, formed by the weekly R1 and the Bollinger band. On the other hand, the political factor is the main driver today, thus, the impact on the USD/JPY currency pair could be unexpected. Downside risks are also present, with the support cluster around 103.85 unlikely limiting possible losses.

Traders' Sentiment
Bullish traders' sentiment keeps fading, as today 58% of all open positions are long, compared to 62% on Monday. Meanwhile, the share of buy orders remains unchanged at 55%.

 

[Anastasia DC]

Gold finds support on Tuesday morning

"Gold held to a narrow range during Asian hours on Tuesday on a steady U.S. dollar as investors remained wary of the implications of the outcome of the U.S. presidential election."
– Apeksha Nair, Reuters

Pair's Outlook
The yellow metal was in a rebound on Tuesday morning, as the bullion found support in a strong cluster near the 1,280 level. The cluster is made up of the 20 and 200-day SMAs, monthly pivot point, weekly S1 and the lower trend line of the previous ascending channel pattern. On early Tuesday morning the metal faced no resistance up to the level of 1,294.23, where the weekly PP is located at, which means that a surge up to this level is likely. The surge will occur, if no fundamental or political news suddenly shock the market.

Traders' Sentiment
Trader are almost neutral, as 51% of open positions are short on Tuesday morning. Meanwhile, 57% of trader set up orders are to by the metal.

 

[Anastasia DC]

EUR/USD skyrockets on Trump lead

"U.S. elections don't normally elicit major market volatility but the problem in 2016 is that for the better part of this year, market participants did not consider a Trump victory realistic."
– Kathy Lien, BK Asset Management (based on investing.com)

Pair's Outlook
The common European currency skyrocketed and touched 1.13 level on Wednesday morning against the US Dollar. The reason is simple, as Trump was winning the US presidential election, and most market participants did not presume it to be possible. There is one reason why the markets did not think of it as possible. The reason is that most traders, bankers, asset managers belong to one social class in the societal hierarchy, which happens to be one of those that voted for Hillary Clinton. The personal bias has made most of forecasts wrong.

Traders' Sentiment
SWFX traders remain short, as 52% of open positions are bearish. In addition, 54% of trader set up orders are to sell.

 

[Anastasia DC]

GBP/USD soars to 1.2550 amid US election results

"In contrast, a Trump victory would trigger massive uncertainty that would likely undermine risk assets at least initially, which in turn could preclude a Fed rate hike this year."
- RBS (based on Reuters)

Pair's Outlook
On Tuesday the Cable remained within a tight range, namely between the monthly and the weekly PPs. With the victory of Donald Trump in the US election, the Greenback weakened slightly, allowing the Sterling to reach the 1.2550 level earlier today. However, the pair was unable to climb higher and retreated almost immediately, with the Pound sliding back below 1.25. Technical studies remain in favour of a positive outcome today, but it is uncertain whether the Sterling will able to maintain trade in the green zone today. The monthly PP is providing strong support, which could help the pair retain its position above 1.24.

Traders' Sentiment
There are 63% of traders with a positive outlook towards the British currency today (previously 62%). Concerning the pending orders, 41% of them are to sell the Pound, compared to 39% on Tuesday.

 

[Anastasia DC]

USD/JPY plunges on Trump's victory

"We are experiencing a similar night to the Brexit. The mispriced Trump victory is taking its toll on the global markets."
- London capital Group (based on Market Watch)

Pair's Outlook
The USD/JPY currency pair climbed over the 105.00 psychological level on Tuesday, with trade closing within the levels forming the nearest resistance cluster. The pair made a sharp U-turn earlier today and dropped more than 400 pips due to Donald Trump winning the election polls. The market's initial reaction was rather harsh, but the situation is expected to stabilise later through the day. The US Dollar is expected to remain in the red zone today, but there is a solid chance of the American Dollar could still recover and close around the 104.00 level. Meanwhile, technical indicators are giving bullish signals, unable to confirm the outlook.

Traders' Sentiment
Today 65% of traders are long the US Dollar (previously 58%), while the share of buy orders increased from 55 to 73%.

 

[Anastasia DC]

Gold jumps during the elections

"We need a new president, Donald Trump, to be the most powerful Republican in America."
– Mitch McConnell, Senate Majority Leader (based on Business Insider)

Pair's Outlook
Gold jumped during the US presidential election, as surprised market participants did not count on Donald Trump leading the race. The yellow metal managed to reach the 1,337 mark on early morning, as the Republican candidate had taken lead of the election. As noted before, the reason for the biased forecasts by the analysts around the world is that most of market participants belong to one social class, which voted for Clinton. In addition these type of analysts and market participants, and their opinion are considered important, as they manage large assets. However, nobody took into account that they might be biased.

Traders' Sentiment
SWFX traders actually shorted the bullion, as 57% of open positions were short on Wednesday morning. However, 57% of trader set up orders are set to buy the bullion.

 

[Anastasia DC]

EUR/USD finds support in Brexit low at 1.0912

"In this changing world, in this risky world that is full of political shocks, my belief is that Europe must retain the capacity to control its own destiny in a world that is becoming more and more difficult to understand."
– Benoit Coeure, ECB (based on Bloomberg)

Pair's Outlook
The common European currency found support against the US Dollar in the post-Brexit low level at 1.0912. Previously, on the US Election Day the currency exchange rate experiences high volatility, as Donald Trump won the race for the seat in the white house. During the day the pair touched the 1.13 level. However, by the end of Wednesday's trading the world calmed down and looked at the situation more pragmatic, without the hysteria of US media. Due to that, the Greenback even strengthened, and the rate fell to the Brexit low level, where it found support and is likely to surge to 1.10, where the weekly S1 is located at.

Traders' Sentiment
SWFX traders are neutral bullish on the pair, as 51% of open positions are long. Meanwhile, 62% of trader set up orders are to sell the Euro.

 

[Anastasia DC]

GBP/USD to keep edging higher

"I don't expect the current dollar rally will last long."
- Daisuke Karakama, Mizuho Bank (based on Business Recorder)

Pair's Outlook
The British currency was unable to sustain solid growth, as it erased most of its intraday gains against the American Dollar on Wednesday. However, a bearish development now is unlikely, as the Cable is supported by the weekly and the monthly PPs just below today's opening price. Furthermore, technical indicators retain bullish signals, bolstering the possibility of the positive outcome. A rally beyond the 1.25 major level is doubtful, as the psychological major level is also reinforced by the Bollinger band. Overall, due to the breach of the post-Brexit down-trend last week, the Sterling is likely to keep outperforming the Greenback in the short-term.

Traders' Sentiment
Today 65% of traders are long the Pound (previously 63%), whereas the number of sell orders returned to its Monday's level of 60%.

 

[Anastasia DC]

USD/JPY sets eye on 105.00

"Trump's ‘America first' stance means weak dollar policies. Gradual dollar weakness and yen strength are going to continue."
- Eisuke Sakakibara, Japan's former top currency official (based on Bloomberg)

Pair's Outlook
Even though the US Dollar slumped more than 400 pips on Wednesday, excessive profit-taking caused the Buck to not only fully recover from those losses, but to even close trade with a 50-pip rally by the end of the day. Today technical studies keep suggesting the USD/JPY pair is to prolong the gains, but a bearish correction is still expected to take place. The Bollinger band around 105.73 is the closest resistance, also indicating the most highest possible level the Greenback can reach during the day. At the same time, the nearest support rests at 104.71, but the 105.00 psychological level is the main intraday target.

Traders' Sentiment
Bulls retreated over the past 24 hours, being that there are 60% of long positions today (previously 65%). Meanwhile, the portion of purchase orders decreased from 73 to 46%.

 

[Anastasia DC]

Gold is back at pre-election levels

"We expect demand for physical gold to go up as people will be going for safe haven buying."
– Ronald Leung, Lee Cheong Gold Dealers (based on Reuters)

Pair's Outlook
On early Thursday morning the yellow metal's price headed higher, as the bullion reached the 1,288 level. Previously, on US Election Day the bullion's price jumped and hit the 1,337 level during the session. However, as the markets calmed down after the first media and previously biased forecast induced hysteria, the yellow metal moved lower and ended the day's trading session at 1,280.82, which is only 0.16% higher than the opening. Once could say that the metal remained flat during the election. Although, it is still possible that the bullion will rise, as president Trump reveals his plans.

Traders' Sentiment
SWFX traders remain bearish, as 56% of open positions were short on Thursday morning. However, 60% of trader set up orders were to buy gold.