"It is clear that there has been some reduction in stretched GBP shorts – yet the scale of this does not seem extreme either."
- Credit Suisse (based on PoundSterlingLive)
Pair's Outlook
For the third consecutive day the Sterling declined against the American Dollar on Thursday, despite initial signs suggesting a rally. With the weekly PP getting pierced yesterday, the Cable now risks sliding deeper down, but with losses most likely limited around 1.25, as the weekly S1, the monthly PP, the two-month up-trend, the 20 and the 55-day SMAs form a strong demand area there. On the other hand, technical indicators keep suggesting the British Pound is to edge higher, unable to confirm the outlook. In case bulls do take over, the exchange rate is expected to remain below 1.2650.
Traders' Sentiment
Traders' sentiment remains unchanged today, with 55% of all open positions still being long. Meanwhile, the number of orders to sell the Sterling increased from 58 to 62%.
"USD/JPY continues to consolidate at the 100 week ma at 114.74, this together with a divergence of the daily RSI and a 13 count does point to a near term correction lower/consolidation."
- Commerzbank (based on FXStreet)
Pair's Outlook
The US Dollar surprised with its performance on Thursday, as it inched higher against the Japanese Yen unexpectedly. As a result, the pair managed to climb over the 23.60% Fibo, which now suggests that more bullish momentum could follow. Even though technical indicators are also in favour of the positive outcome, the 114.50 psychological level should be considered as a potential resistance, as it prevented the Buck from edging higher on several occasions last week. Meanwhile, the nearest resistance rests only at 115.14, represented by the weekly R1.
Traders' Sentiment
There are now 60% of traders with a negative outlook towards the Greenback, compared to 62% yesterday. The portion of orders to purchase the Buck, however, remains unchanged at 52%.
"Spot gold was set for a weekly decline of about 0.8 percent, pressured by the stronger U.S. dollar and expectations that the Fed will raise interest rates next week."
- Lisa Twaronite & Wayne Cole (Based on Reuters)
Pair's Outlook
Gold opened Friday's session facing the established level of significance at 1,169.10 which leaves little to the broken upper trend-line of the monthly channel. XAU/USD has not been able to step under the area for the seventh consecutive session and will require some decent supply pressures in order to close beneath. This would lead to the next floor at 1,166.24, corresponding to the upper boundary of the broken channel, which would be a reasonable downside range for Friday. Gains are likely to be cut by 1,178.21, the weekly Pivot Point.
Traders' Sentiment
Positive sentiment shows that Gold is bought in 60% of all cases for the sixth consecutive session, while pending orders are pointing out an immense shift in bearish sentiment to dive from 68% on Thursday to 59% Friday morning.
"The odds of the euro weakening to $1 in the next six months have risen to about 44 percent, from 31 percent on Dec. 7, the day before the ECB decision, options prices show."
– Stefania Spezzati (Based on Bloomberg)
Pair's Outlook
While still remaining its track towards the bottom boundary of the senior three-month channel, EUR/USD posted a green candle Monday morning. The pair dashed through the bottom Bollinger Band – November low at 1.0552/54, which was the single resistance level solid enough to put up some supply pressures and push it of the track. The next level to stick on to lies just at 1.0646, and is unlikely to be attacked during today's session. We still expect the general motion to remain bearish both in the short and long-term, as the pair makes its way towards the bottom trend-line of the descending channel.
Traders' Sentiment
Traders show an improvement in sentiment with 57% of positions being long, while pessimism reflects in pending orders with 65% of short positions.
"The resilience of the UK economy is also highlighting the similarities in the UK and US economic cycles, (with) cyclical lows in unemployment rates, strong consumer spending and finally rising wage growth."
- MUFG (based on Business Recorder)
Pair's Outlook
At the end of the previous week the British Pound continued to weaken against the US Dollar, but with the 1.2550 level still providing sufficient support and limiting downside volatility. Since demand around that area remains strong, there is little room left for another decline, suggesting the Sterling could rebound today. Moreover, technical indicators are in favour of the positive outcome. As a result, the GBP/USD pair has a chance to reclaim the 1.26 major level, with the weekly PP at 1.2634 preventing any further bullish development. In case bears manage to push the pair below the mentioned 1.2550 mark, the wedge's trend-line at 1.2511 is expected to remain intact.
Traders' Sentiment
There are 58% of traders with a positive outlook towards the Pound today, while 60% of all pending orders are to sell it.
"The speed of the dollar's rise has been quite faster than anyone had expected, and we don't know much about what Trump's administration will actually do, so there might be a correction, but we don't know when it will actually be."
- IHS Markit (based on Reuters)
Pair's Outlook
Friday ended with the Greenback posting solid gains versus the Japanese Yen, with the 115.00 level being easily overcome, as the 114.50 psychological resistance failed to limit the gains. According to technical indicators, the USD/JPY is to keep edging higher today, but with gains unlikely exceeding 100 pips, as the weekly R1 and the upper Bollinger band form a relatively tough resistance area circa 116.35. A bearish development is doubtful, due to the Buck being supported by a four-week up-trend, which in turn is reinforced by the weekly PP, the weekly S1 and the 23.60% Fibo.
Traders' Sentiment
Market sentiment did not change over the weekend, with 60% of traders being short and the remaining 40% being long the US Dollar. At the same time, the share of sell orders increased from 48 to 59%.
"Gold prices have now erased 10 months of gains after posting their biggest monthly drop in more than three years."
- Jan Harvey (Based on Reuters)
Pair's Outlook
Gold returned inside of the channel down pattern it had exited the sessions before, and opened with a red candle Monday morning. The pair is once again steadily approaching the senior downward sloping trend-line, which will cut the losses at 1,147.04. If XAU/USD respects the aforementioned boundary, the channel will eventually have to break in order for the pair to take on a southward motion of flatter nature. The downtrend is currently bolstered by the bottom Bollinger Band and weekly S1, which makes us strongly believe that a break below is unlikely.
Traders' Sentiment
Positive sentiment shows that Gold is bought in 62% of all cases, up from 60% the six consecutive sessions before, and pending commands show the same number, which is a 3% increase from the last session.
"The Dollar fell prey to cautious profit-taking. Investors apparently are turning a bit more cautious on the Dollar ahead of the Fed policy decision."
- KBC Markets (based on PoundSterlingLive)
Pair's Outlook
The British currency set off with a strong rally against the US Dollar this week, having not only retaken the 1.26 major level, but also having put the 1.27 mark to the test. Even though the 1.27 major level represents some psychological resistance, the GBP/USD pair has the potential to reach 1.2740, with the overall intraday high expected to be the 1.2771 level—where the 100-day SMA is located at. Technical indicators support the possibility of the positive outcome today, but a lot of impact is still likely to be from the fundamental events today, meaning that solid downside risks are present, in which case the pair could retreat back to 1.26.
Traders' Sentiment
Both long positions and sell orders take up 59% of the market today, compared to 58% and 60% on Monday, respectively.
"The European Central Bank's latest policy decision is reinforcing calls for the euro to drop to parity against the dollar."
– Stefania Spezzati (Based on Bloomberg)
Pair's Outlook
EUR/USD surprised with a second consecutive green candle Tuesday morning, after posting a one percent gain on Monday. The pair is currently testing the weekly Pivot Point at 1.0646, but the general sentiment remains bearish inside of a descending channel pattern. It appears that a close below 1.0550, the November low has not been sustainable just yet and Tuesday's session could either post a small green candle or a decent red one. Movements to the downside will be cut by 1.0566, the bottom Bollinger Band.
Traders' Sentiment
Traders show less optimism among SWFX traders with 54% of positions being long, down from 57% on Monday, while pessimism reflects in pending orders with 63% of short positions.
"The pair looks poised to head towards projected potential of the pattern and graphical levels at 116. Short term retracement, if any, should be cushioned at daily channel drawn since June near 109."
- Societe Generale (based on FXStreet)
Pair's Outlook
Despite the USD/JPY pair being supported by a strong demand area, bears still managed to push the pair lower on Monday. However, the four-week up-trend is only closer now, implying that the bullish momentum is likely to be regained. Technical studies both in the daily and the weekly timeframes support the possibility of a rally. The closest resistance is located only around 116.50, leaving sufficient space for a strong rally. On the other hand, there are no solid market drivers present today that could trigger such a substantial upside movement; thus, the Buck is expected to remain between 115.00 and 116.00.
Traders' Sentiment
Bears keep losing numbers, as 57% of all open positions are short today, compared to 60% on Monday. As for the pending orders, 60% of them are to sell the Greenback, just one percentage point more.
"Spot gold inched lower to $1,161.01 an ounce, but remained above 10-month lows hit on Monday as U.S. Treasury yields came off their highs."
- Ayai Tomisawa (Based on Reuters)
Pair's Outlook
Following unexpected gains on Monday, Gold jumped out of the month-long pattern once again, proving it to become irrelevant for future movements. XAU/USD maintained largely the same distance from the senior downtrend and is now attempting what looks like another attempt at touching it. The broken channel boundary will put up a battle at 1,158.06, but any upside potential is likely to be cut by 1,167.76/1,169.10 – the weekly Pivot Point strengthened by the recent support turned resistance.
Traders' Sentiment
Positive sentiment shows that Gold is bought in 62% of all cases, up from 60% the six consecutive sessions before, while pending commands have added 6% to show 68% of long positions outstanding.
"The dollar took a breather on Wednesday as investors waited to see if the U.S. Federal Reserve will signal any acceleration in the pace of future rate increases."
– Hideyuki Sano (Based on Reuters)
Pair's Outlook
As expected, EUR/USD posted a red candle and created a long legged candle amid volatile intra-day movements. The pair opened Wednesday's session on a bullish note, testing the weekly Pivot Point at 1.0646. Considering the bearish nature of the motion towards the bottom trend-line of the two-month channel, we would expect the gains to be cut sometime soon in order to maintain the intended track. The next resistance lies at 1.0679 and support – at 1.0564, and based on the channel still being intact, we would expect a red candle today.
Traders' Sentiment
SWFX traders slightly upped their bullish sentiment to show 55% of all positions being long, compared to 54% on Tuesday. Pending orders, however, entered deeper pessimism with 64% (+1%) of commands being to sell the pair.
"The markets think a rate hike is a certainty so the focus is on the outlook for next year. I think they will maintain their previous projections to raise rates twice next year but if they turn more hawkish, the US dollar will test its upside again."
- Shinichiro Kadota, Barclays (based on The Business Times)
Pair's Outlook
Ahead of the FOMC meeting and the Federal Funds Rate decision the Sterling was unable to post gains against the US Dollar, having closed with a 24-pip loss. Should the Funds Rate remain unchanged today, the Sterling will be able to reach a new two-month high, meaning the immediate resistance area around 1.2750 will be overcome. Technical indicators also suggest the positive outcome is due, but we should not rule out the possibility of bears taking over, in which case the broadening rising wedge's support line at 1.2533 could be not only put to the test, but even pierced.
Traders' Sentiment
Bullish market sentiment remains unchanged at 59% today, whereas 62% of all pending orders are to sell the British currency, compared to 59% on Tuesday.
"If Treasury yields could correct lower after the FOMC outcome, that means the yen could appreciate again. Until then, the pair is range-bound in the 115-level."
- Mizuho Securities (based on Business Recorder)
Pair's Outlook
The USD/JPY currency pair remained relatively unchanged on Tuesday, managing to retain its position above the 115.00 mark. From the technical point of view, the Buck is likely to strengthen against the Japanese Yen today, rebounding from the four-week up-trend and putting the immediate resistance area circa 116.30 to the test. On the other hand, with fundamental events being the main drivers today, the outcome can be less pleasant for the American Dollar. There are risks involved, which can cause the given pair drop even below 113.00, completely ignoring the two closest demand areas.
Traders' Sentiment
Even though bulls gained some numbers over the day, traders' sentiment remains bearish, now at 56%. At the same time, the share of orders to sell the Greenback returned to its Monday's level of 59%.
"Yellen took a rare victory lap Wednesday, signaling the economy is strong and will improve further, allowing the Federal Reserve to continue to raise rates next year. "
– Hideyuki Sano (Based on Reuters)
Pair's Outlook
EUR/USD dived beneath the bottom Bollinger Band amid a continuation of the senior two-month descending channel, in which the rate is now targeting the bottom trend-line. The boundary lies at 1.0325 and is likely to come into play some other session rather than this one. Immediate support is set at 1.0419 and is currently the only level that serves as an obstacle to the ultimate target. We consider the resistance of 1.0532/50 to be one of significance, and unlikely to let the rate through. Based on the bearish continuation, we stand in favour of a red candle at closing time.
Traders' Sentiment
SWFX traders upped their bullish sentiment to show 58% of all positions being long, compared to 53% on Tuesday. Pending orders, however, entered deeper pessimism with 65% (+1%) of shorts.
"I thought we would be calling the (Fed chief Janet) Yellen bluff this morning, as the market had expected at most a subtle shift in Fed language. However, the Fed's forward guidance is in reaction to Trumpflation as Dr Yellen did little to quell the markets' pent up the view that both growth and inflation will accelerate in 2017."
- Stephen Innes, senior trader at OANDA (based on The Business Times)
Pair's Outlook
The GBP/USD currency pair underwent the anticipated decline on Wednesday, but with the broadening rising wedge's support line remaining intact. The trend-line was confirmed, but is still under the risk of getting breached today, as a number of fundamental events could trigger Pound-selling. The trend-line is also weaker today, as it is now reinforced only by the 20-day SMA, rather than the weekly S1, the monthly and the 55-day SMA as yesterday. As a result, the Cable risks falling back under 1.25, despite technical indicators retaining bullish signals. On the other hand, yesterday's losses could be completely erased should the fundamental data turn in Sterling's favour.
Traders' Sentiment
Today 60% of all open positions are long (previously 59%), while the share of sell orders returned to its Monday's level of 60%.
"The focus now falls on U.S. equities and whether they can withstand the surging dollar and Treasury yields. If not, we could see the Trump camp warn against the appreciation of the dollar."
- IG Securities (based on Business Recorder)
Pair's Outlook
With Fed increasing the funds rate yesterday, the US Dollar successfully outperformed the Yen, thus, reconfirmed the four-week up-trend. Moreover, the Buck managed to climb over the 117.00 level, stabilising above a relatively strong resistance area, suggesting that more gains could now follow. Furthermore, technical indicators also imply the USD/JPY currency pair is to advance today. The Bollinger band around 117.29 represents immediate resistance, but a much strong cluster rests circa 118.75, formed by the weekly R3 and the monthly R1, which is the main target. However, there are doubts the US Dollar will be able to maintain trade above 118.00.
Traders' Sentiment
Market sentiment remains bearish, now with 57% of traders holding short positions. The portion of sell orders remains unchanged at 59%.
"Gold dropped to its lowest in more than 10 months around $1,135.1 an ounce and last stood at $1,141.9."
- Wayne Cole and Hideyuki Sano (based on Reuters)
Pair's Outlook
A dip below the senior downtrend came as a surprise on Wednesday, as well as a confirmation of the month-long channel relevance. XAU/USD is currently attempting to dive underneath the bottom Bollinger Band at 1,138.73 and will face more risk at 1,135.96, the weekly S2. We would expect a retracement from the broken trend-line, meaning that the Bullion could reverse until the end of the day, but might as well manage to extend a dive if the correction comes sooner. Ultimately we would expect the pair to target the bottom boundary of the channel at 1,115.66.
Traders' Sentiment
Traders reminded optimistic on the bullion showing a 62% long position proportion, same as the two previous sessions, while long pending orders added 4% and resulted in a 67% reading.
"Gold rose on Friday but remained near its weakest level in 10-1/2 months as an interest rate increase by the U.S. Federal Reserve and hints of further hikes in 2017 dampened the safe- haven appeal of the metal."
– Swati Verma (Based on Reuters)
Pair's Outlook
Following an attack at the 1.0419 level, the pair confirmed its significance with a reversal Friday morning. Immediate resistance now lies at 1.0453 and is likely to steal some momentum from the upward motion. While a green candle at closing is quite a credible scenario for EUR/USD, the pair is still on a streak of losses both short and long term, as it makes its way towards the bottom trend-line of the two-month descending channel. The pair has currently set ground at the aforementioned 1.0419 level with more risk at 1.0313/04.
Traders' Sentiment
SWFX traders mitigated their bullish sentiment to show 55% of all positions being long, compared to 58% on Thursday. Pending orders, however, showed a little less pessimism with 60% (-5%) of shorts.
"GBP/USD has failed at the 1.2692 resistance line drawn from September. Last week the market failed at the 1.2746 100 day ma and we look for the market to come under increasing downside pressure."
- Commerzbank (based on PoundSterlingLive)
Pair's Outlook
The negative for the British Pound scenario prevailed yesterday, with the wedge pattern broken to the downside and the 1.25 major level also getting crossed. The Cable managed to find support only in front of the 1.24 mark, which is bolstered by the weekly S2. As technical studies keep giving bullish signals today, a correction could occur, but with the 1.25 level most likely remaining intact. On the other hand, a breach of the wedge pattern should be accompanied by more bearish momentum, in which case a slump under 1.24 is to take place, with the next support in sight being the Bollinger band around 1.2343.
Traders' Sentiment
Market sentiment slightly improved over the day, as 61% of all open positions are now long (previously 60%). At the same time, the number of sell orders increased, namely from 60 to 63%.
