Daily Technical Analysis for Majors by Dukascopy

[Anastasia DC]

EUR/USD trades below Brexit low level

"For Europe to be strong in terms of defense and security, it must have a strong economy. And for the economy to be strong, reforms are needed in every country and the euro area must function better."
– Benoit Coeure, ECB (based on Reuters)

Pair's Outlook
The common European currency surged against the US Dollar on early Friday morning, as the currency exchange rate attempted to break the resistance put up by the Bexit low level at 1.0911. The pair found support during Thursday's trading session in the second weekly support level at 1.0866. Afterwards the currency pair rebounded and began the surge, which followed into Friday. Traders should watch the rate for a reversal or a break of the resistance, which would reveal the rate's further movement.

Traders' Sentiment
Traders are slightly bullish on the pair, as 53% of open positions were long on Friday. Meanwhile, trader set up orders were bearish, as 64% of pending commands were to sell the Euro.

 

[Anastasia DC]

GBP/USD attempts to reclaim the 1.26 level

"Structurally, we remain fairly bearish on the pound. We have $1.20 for the end of the year and $1.10 for the end of next year. We're feeling pretty comfortable with those at the moment."
- HSBC (based on Business Recorder)

Pair's Outlook
The GBP/USD currency pair overperformed on Thursday, as it breached the 1.25 major level and established a new four-week high yesterday. The Pound still faces the upper Bollinger band today, but according to technical indicators the pair is to keep edging higher today. Ultimately, the Cable could easily retake the 1.26 major level, with focus shifting to the next strong resistance area around the 1.27 mark, represented by the weekly R1, the 23.60% Fibo and the 55-day SMA. However, in case of the bearish outcome the 1.24 mark is expected to remain intact, as demand around that psychological level is sufficient to limit the losses.

Traders' Sentiment
Although not as strong as yesterday, but market sentiment remains bullish at 62% (previously 65%). At the same time, the share of sell orders lost five percentage points, having fallen to a total of 55%.

 

[Anastasia DC]

USD/JPY struggles to climb over 107.00

"We turned bullish yesterday and the immediate target of 106.50 was quickly exceeded (overnight high of 106.94). The focus from here is at the July's high of 107.45/50."
- UOB Group (based on FXStreet)

Pair's Outlook
The Buck appreciated more than 100 pips against the Japanese Yen on Thursday, moving the opposite way of the expectations. The USD/JPY pair breached a strong resistance cluster yesterday, which is now providing immediate support, suggesting more bullish momentum is to follow. Technical indicators are bolstering this possibility, as they keep giving bullish signals in the daily timeframe; however, the 107.00 psychological level could be difficult to retake, as the pair was unable to edge beyond this area since July 2016. Consequently, downside risks persist, especially since longer-period technical studies shifted to the bearish side.

Traders' Sentiment
Market sentiment remains bullish at 60% today, but all pending orders are now equally divided between the buy and the sell ones.

 

[Anastasia DC]

Gold falls to the 1,250 once more

"Gold remained volatile in Asian trade on Friday and was set for its first weekly decline in four."
– Apeksha Nair, Reuters

Pair's Outlook
It seems that the markets have fully returned to the pre-election levels, as the yellow metal was in rebound after finding support in the 1,250 level, which is the 38.20% Fibonacci retracement of the metal's historical high and low levels. Moreover, the bullion had additional support during Friday morning, as the commodity price managed to move above the second weekly S2, which is located t 1,257.46. It is likely that the bullion will surge by the end of the day, as the 1,250 level's support has not been passed no matter how many attempts were made.

Traders' Sentiment
Traders remain slightly short, as 53% of open positions were short on Friday morning. Meanwhile, trader set up order remained bullish, as 56% of pending commands were to buy the bullion.

 

[Anastasia DC]

EUR/USD falls below last support before 1.07

"The Trump victory has resulted in concerns that we could see similar outcomes in the elections in Europe."

– Georgette Boele, ABN Amro (based on Bloomberg)



Pair's Outlook

On early Monday morning the common European currency was in its sixth consecutive session of losses against the Greenback, as the currency exchange rate fell below the March low level and the first monthly support, which are located respectively at 1.0822 and 1.0806. Further below the EUR/USD currency exchange rate there are no support levels until the January low, which is at 1.0709. In addition, the historical low is also supported by the weekly S1 at 1.0688. However, daily aggregate technical indicators forecast that the rate will remain unchanged by the end of the day.


Traders' Sentiment

SWFX traders remain bullish, as 56% of open positions are long. However, trader set up orders are bearish, as 69% of set up commands are to sell.

 

[Anastasia DC]

GBP/USD fails at 1.2600 cloud

"The British Pound may stage a larger relief rally over the days ahead should the key developments coming out of the UK raise the outlook for inflation and dampen market expectations for another round of monetary support."

- Daily FX


Pair's Outlook

GBP/USD entered Monday's trading session red, testing the weekly Pivot Point right under a daily cloud resistance. The pair appears to have entered a rising wedge, suggesting that 1.2495 will be critical to gain insights on the next movement. While a close below would put 1.2416, the weekly S1 into perspective, a bounce from the area would still preserve bearish potential for a downside breakout over the next few days. We see the rate maintaining the northward motion during the day with various time-frame SMAs weighing on the currency pair from above.


Traders' Sentiment

Although not as strong as yesterday, but market sentiment remains bullish at 61% (previously 62%). At the same time, the share of sell orders gained four percentage points, having fallen to a total of 59%.

 

[Anastasia DC]

USD/JPY leaves 107.00 below

"Bank of Japan Governor Haruhiko Kuroda on Monday urged companies to hike wages in line with the central bank's 2% sustained inflation target and said fiscal and monetary measures will remain keys to boosting the economy."

- investing.com


Pair's Outlook

Following the inability for USD/JPY to make critical moves on Friday, the pair opened on a positive note, distancing itself from the 38.20% (2015-2016 dive) Fibonacci level and psychological 107 yen area, which it had addressed the session before. A gain is likely to be cut by the 108.18 yen level, where the monthly R2 lies, shifting risk to 108.70 in case broken. Significant supply will limit movements underneath, clustering the monthly R1 and 200-day SMA to battle the weakness. We lean in favour of a close in green, due to the latest fifth wave failure on the hourly chart.


Traders' Sentiment

Market sentiment remains bullish at 59% today, but pending buy orders lost two percent and now show 48%.

 

[Anastasia DC]

Gold on its way down to 1,200 level

"Gold fell 1 percent on Monday to hit its lowest in more than five months, pressured by a stronger U.S. dollar and expectations the Fed will raise interest rates in December."

– Apeksha Nair, Reuters


Pair's Outlook

The yellow metal continued to fall on early Monday morning, as the US Dollar continued to gain strength in the aftermath of the previous week's US presidential election outcome. Previously, during Friday's trading session the bullion fell 2.56% and ended the day's session at 1,225.96. On Monday the metal had no near support, which could stop its fall, as the closes support levels were located near the 1,200 level. Near the 1,200 mark the second monthly support is located at 1,200.77 and the May low level is at 1199.58.


Traders' Sentiment

Traders have become slightly bullish, as 52% of open positions were long on Monday morning. Meanwhile, 58% of trader set up orders are to buy the bullion.

 

[Anastasia DC]

EUR/USD falls below last support before 1.07

"Trump's policies of pushing fiscal expansion on an economy that is near full employment are going to be met by a faster pace of hikes than there would have been otherwise."
– Enrique Diaz-Alvarez, Ebury (based on Bloomberg)

Pair's Outlook
The common European currency scored about fifteen pips against the US Dollar on early Tuesday morning, which could almost be called as remaining flat. Previously, on Monday the currency exchange rate fell from 1.0833 to end the day at 1.0737. During the move the pair passed the support cluster made up of the March low of 1.0822, the long term pattern's lower trend line at 1.0830 and the first monthly support level at 1.0806. It is most likely that the exchange rate will remain flat by the end of the day.

Traders' Sentiment
SWFX traders remain bullish on the pair, as 58% of open positions were long on Tuesday morning. Meanwhile, 65% of trader set up orders are to sell the Euro.

 

[Anastasia DC]

GBP/USD in limbo around 1.25

"Considering that overall short positioning remains elevated, further corrective sterling upside seems likely in the short term."
- Credit Agricole (based on Business Recorder)

Pair's Outlook
Following yesterday's outlook, the Cable's fate is to be determined today. Technically, signs are pointing to a possible bullish development today, with the GBP/USD pair being supported by an up-trend just below the opening price and technical studies retaining positive signals. A successful rally would preserve the rising wedge pattern, allowing the Sterling to reclaim 1.26 once again. On the other hand, risks of a breakout are also present, which would put the monthly PP into perspective, but with the 1.24 major level most likely remaining intact today.

Traders' Sentiment
Market sentiment remains bullish, with 62% of all open positions still being long. At the same time, the share of sell orders barely changed, having fallen from 59 to 58% over the last 24 hours.

 

[Anastasia DC]

USD/JPY to take another shot at 108.70

"I don't think the dollar's uptrend will be disrupted easily, but it would not be a surprise to see adjustments after such rapid gains."
- Takuya Kanda, senior researcher at Gaitame.com Research Institute (based on Market Watch)

Pair's Outlook
As was anticipated, the US Dollar successfully outperformed the Japanese currency on Monday, with trade closing in between the monthly R2 and the weekly R1 resistance cluster. Although there are some downside risks, technical indicators keep suggesting the USD/JPY continue edging higher today. The monthly R2 and the Bollinger band form a relatively strong demand area around the 108.00 yen level, while the weekly R1 at 108.70 remains a solid resistance. However, the pair is seen eventually reaching the 110.75 mark, namely where the weekly R2 coincides with the monthly R3.

Traders' Sentiment
There are only 54% of traders that have a positive outlook towards the US Dollar today, compared to 59% on Monday. Meanwhile, the portion of orders to sell the Greenback increased from 52 to 53%.

 

[Anastasia DC]

Gold trades near 1,225

"Given such a sharp drop, the fall would be cushioned by physical demand pickups."
– Vyanne Lai, NAB (based on Reuters)

Pair's Outlook
On Tuesday morning the bullion regained Monday's losses, as the metal traded near the 1,225 mark. Previously, the yellow metal did not drop down to the 1,200 level on Monday, as it stopped near the 1,219.50 level by the end of the day. The stop of the fall is explained by a pick-up in physical buying of gold, as lower prices attracted more market participants. Daily aggregate technical indicators forecast that the metal will remain flat by the end of the day, which might occur, as the markets search for clues regarding the commodity price in the aftermath of the recent fall.

Traders' Sentiment
Traders have not changed their opinion, as 52% of open positions remain long. Meanwhile, 60% of trader set up orders are to buy the bullion.

 

[Anastasia DC]

EUR/USD in limbo between levels of significance

"Markets have then stepped up to pretty much fully pricing a December move, although we do need to see greater clarity from Trump and his new administration."
– Su-Lin Ong, Royal Bank of Canada (based on Bloomberg)

Pair's Outlook
The common European currency slightly surged on Wednesday morning against the US Dollar, as the currency exchange rate was in a rebound against the January low level of 1.0709. Previously, during Tuesday's trading session the currency pair bounced between the January low level and the March low level of 1.0822. In addition, the March low is strengthened by the first monthly support level at 1.0806. Moreover, the January low is supported by the lower Bollinger band at 1.0695 and the weekly S1 at 1.0688. It is most likely that the rate will continue to bounce between the two clusters.

Traders' Sentiment
Traders have not changed their opinion since yesterday at all. Open positions remain 58% long, and trader set up orders are still bearish, namely 65% of pending commands are to sell.

 

[Anastasia DC]

GBP/USD in tight range between 1.24 and 1.2550

"Added newsflow around Brexit means that there is still added downside pressure for sterling."
- GKFX (based on Business Recorder)

Pair's Outlook
The breakout from the rising wedge pattern occurred earlier than anticipated, being that the Cable edged lower on Tuesday. As a result, the monthly PP was put to the test, as was anticipated, but with trade closing at 1.2457, thus, allowing the cluster circa 1.2380 to retain its role of the key support area. Furthermore, due to the breach of the wedge, the GBP/USD pair risks falling deeper down. Moreover, technical studies are no longer giving bullish signals, creating a possibility for the bearish momentum to take over. On the other hand, there is a chance for a small correction take place, but with the weekly PP, the nearest resistance, remaining intact.

Traders' Sentiment
There are 64% of traders with a positive outlook towards the Sterling today, while 61% of all pending orders are to sell the British currency.

 

[Anastasia DC]

USD/JPY sets eye on 110.00

"I don't think the dollar's uptrend will be disrupted easily, but it would not be a surprise to see adjustments after such rapid gains."
- Takuya Kanda, senior researcher at Gaitame.com Research Institute (based on Market Watch)

Pair's Outlook
The USD/JPY currency pair continued to appreciate on Tuesday, successfully piercing the weekly R1 at 108.70, also reaching the ascending channel's upper border. Right now the Greenback is supported by the Bollinger bond, the weekly R1, the monthly R2 and the channel's lower boundary, preventing the exchange rate from sustaining losses. However, the American Dollar is unlikely to put the resistance area around 110.80 to the test, as there is no impetus present for the Buck to jump that far. Moreover, the channel's upper border could stop further appreciation around the 110.00 level.

Traders' Sentiment
Market sentiment reached a perfect equilibrium today. At the same time, the number of pending orders shifted to the positive side, as 51% of them are to purchase the US currency, compared to 47% yesterday.

 

[Anastasia DC]

Gold approaches 1,240 mark

"At this moment there is some kind of rebound but $1,230 should be the immediate resistance level that it should not cross with a very high momentum."
– Mark To, Wing Fung Financial Group (based on Reuters)

Pair's Outlook
The yellow metal moved slightly to the upside on Wednesday morning, however, its gains could more be described as remaining flat. Previously, on Tuesday the bullion changed its course after falling for three consecutive trading sessions, and the metal also erased all of the Monday's losses. The commodity price is set to encounter resistance at 1,238.39, where the monthly S1 is located at. Afterwards, gold is likely to move lower. Moreover, such a hypothesis is also supported by the daily aggregate technical indicators.

Traders' Sentiment
SWFX traders have not changed their positions, as traders remain neutral bullish on the pair, namely 52% of open positions are long. Meanwhile, trader set up orders are a lot more bullish, as 64% of pending commands are to buy the metal.

 

[Anastasia DC]

EUR/USD falls below 1.07 mark

"Trump's policies of pushing fiscal expansion on an economy that is near full employment are going to be met by a faster pace of hikes than there would have been otherwise."
- Enrique Diaz-Alvarez, Ebury (based on Bloomberg)

Pair's Outlook
The common European currency traded squeezed in between the January low level of 1.0709 from the upside and the weekly S1 at 1.0681 against the US Dollar on Thursday morning. Previously, on Wednesday morning the currency exchange rate marked its eight consecutive session of losses, as the Trump Jump of the US Dollar does not seem to actually stop. Some analysts are even putting parity of the exchange rate back on the discussion table. However, today's outlook seems kind of grim for traders, as the pair is most likely to remain squeezed in between the two levels.

Traders' Sentiment
SWFX traders remain bullish on the pair, as 57% of trader open positions were long on Thursday. Meanwhile, 62% of trader set up orders were to sell the pair.

 

[Anastasia DC]

GBP/USD still stuck between 1.24 and 1.2550

"Cable is set for a deeper correction to 1.2350 for a head-and-shoulders formation following last Friday's peak at 1.2673."
- London Capital Group (based on PoundSterlingLive)

Pair's Outlook
The Sterling remained relatively unchanged against the US Dollar yesterday, having experienced a small eight-pip decline. The support area around 1.2390, represented by the weekly S1, the monthly PP and the 20-day SMA, remains strong, thus, a significant drop today is doubtful. Meanwhile, technical indicators are in favour of the bullish outcome, with the weekly pivot point at 1.2544 retaining its role of the immediate resistance. However, the exchange rate is unlikely to reach the immediate supply level, as the 1.25 psychological mark should also be considered as a potential resistance, which kept the GBP/USD pair at bay during the previous two sessions.

Traders' Sentiment
Bulls keep gaining numbers, as 66% of all open positions are long (previously 64%). The portion of sell orders inched up from 61 to 64%.

 

[Anastasia DC]

USD/JPY to preserve the channel pattern

"Rises in U.S. yields have been a significant factor behind the dollar's strength, but since that has started to calm down for now, moves in the dollar against yen have also settled down."
- Barclays (based on Business Recorder)

Pair's Outlook
The Greenback failed to preserve its gains against the Japanese currency on Wednesday, ultimately closing with a several-pip decline. Nevertheless, the ascending channel pattern remains intact, with the channel's lower boundary, the weekly R1 and the monthly R2 forming immediate support circa 108.60. Meanwhile, the upper Bollinger band is the closest resistance, but is unlikely to prevent the USD/JPY pair from appreciating further. The main target is the cluster around 110.80, represented by the pattern's upper border, the weekly R2 and the monthly R3, which also remains out of reach, despite technical studies bolstering the possibility of the positive outcome today.

Traders' Sentiment
Bulls and bears broke out of equilibrium, taking up 49% and 51% of the market, respectively. The share of sell orders surged from 49 to 57%.

 

[Anastasia DC]

Gold remains flat

"We need something for gold to follow. At this moment there is nothing supporting movement and investors are sidelined."
– Yuichi Ikemizu, Standard Bank (based on Reuters)

Pair's Outlook
The title explains it almost fully, as the yellow metal remained near 1,225 levels on Thursday morning. However, it has to be noted that it is somewhat strange that the bullion has not continued to fall during this week, as the opposite of, what occurs in the metal's situation, has been occurring across the markets. Risk on sentiment is back on, as investors retreat from the safe investments, which were bought pre-election. Market participants will most likely continue to wait for additional information, which will affect the bullion's price.

Traders' Sentiment
Traders remain almost neutral, as 53% of open positions were long on Thursday. However, traders did not change their outlook for the three previous trading sessions, when 52% of open positions were long. Meanwhile, 59% of trader set up orders are to buy the bullion.