Daily Technical Analysis for Majors by Dukascopy

[Anastasia DC]

Gold continues to surge

"Buying shows that people are looking ahead this week with Trump's inauguration and discussions on Brexit. There is a lot of uncertainty moving forward."
– Brian Lan, GoldSilver Central (based on Reuters)

Pair's Outlook
On Monday morning the yellow metal was in its sixth consecutive trading session of gains, as the metal traded near the 1,205 mark and was set to score even more gains. The bullion faced no resistance up to the level of 1,211.87, where the first weekly resistance level was located. The commodity price did not simply just jump to this level due to the technical resistance, provided by minor levels of significance, which create the slowed down movement of a financial instruments price.

Traders' Sentiment
SWFX traders remain bullish regarding the future outlook of the yellow metal's price, as 54% of trader open positions are long. In the meantime, 62% of trader set up orders were to buy the metal.

 

[Anastasia DC]

EUR/USD remains above 1.06

"Draghi wants to deliver loose monetary message."
– Steven Saywell, BNP Paribas (based on Bloomberg)

Pair's Outlook
The common European currency, as forecasted, found support in the monthly PP at 1.0580 against the US Dollar during Monday's trading session. Due to that reason the currency exchange rate began a surge, which lasted into Tuesday. However, on Tuesday morning the currency pair encountered resistance and began to decline. It is most likely that the rate will decline once more at least until the weekly PP at 1.0594 or the previously mentioned monthly PP. In the meantime, a fall of the Euro is still expected on a larger scale.

Traders' Sentiment
SWFX traders remain neutral on the pair. In the meantime, 67% of trader set up orders are set up to sell the Euro in favor for the US Dollar.

 

[Anastasia DC]

GBP/USD surges ahead of UK May's speech

"Every time there's 'hard Brexit' headlines, that triggers a fresh bout of selling sterling."
– MUFG (based on Business Recorder)

Pair's Outlook
As was anticipated, the British Pound partially recovered from the bearish gap yesterday, but with the 1.21 level still remaining intact. Today, however, the Sterling is under high risk of falling even under the 1.19 mark, with UK Prime Minister's speech being the driver, as she is expected to unveil all Brexit details today. Hard Brexit clues are likely to be devastating for the Pound, but positive news could even trigger a surge above 1.22, meaning the two closest resistances are to be pierced. However, technical indicators are unable to confirm either scenario, as they keep giving mixed signals in the daily timeframe.

Traders' Sentiment
Although not as strong as yesterday, but market sentiment remains bullish at 73% (previously 73%). At the same time, all pending orders are equally divided between the buy and the sell ones.

 

[Anastasia DC]

USD falls as demand for safe haven Yen rises

"The risk-averse sentiment stemming from 'hard Brexit' (worries) is pushing down the dollar/yenю But so far, I think the correction from the dollar/yen's high in December, and concerns about stronger protectionism under the new US presidency, have been the dominant theme."
– Mizuho Securities (based on Reuters)

Pair's Outlook
For the sixth consecutive day yesterday the US Dollar weakened against the Japanese Yen, however, retaining its position above the 114.00 level. Even though the pair is supported by a tough demand cluster, represented by the 55-day SMA, the Bollinger band, the weekly and the monthly S1s, downside risks still persist. Moreover, technical studies also suggest the Greenback is to weaken, as they are now giving bearish signals. Risk-aversion is once again the main driver for the USD/JPY currency pair; in case of a hard shift to the risk-off sentiment, the 113.00 mark is expected to fail to hold the pair afloat today.

Traders' Sentiment
Traders' sentiment reached a perfect equilibrium today, whereas the portion of purchase orders inched slightly down, namely from 73 to 69%.

 

[Anastasia DC]

Gold above 1,210

"Gold is going to do very well in the first half of the year due to Brexit concerns, Chinese currency pressure and uncertainty surrounding Donald Trump's policies."
– Richard Xu, HuaAn Gold (based on Reuters)

Pair's Outlook
As predicted, the yellow metal trades above the 1,210 mark on Tuesday morning. However, after the drastic surge it is most likely that the bullion's price will slightly retreat, as some will take out profits. Although, from a technical perspective the rate has run into the first weekly resistance at 1,211.87. It will take some time until gold break this resistance. After that occurs the commodity price will aim for a new target, which is located near 1,219 level. There the combined resistance of the 38.20% Fibonacci retracement level with the second monthly resistance are located.

Traders' Sentiment
Traders remain bullish on the bullion, as 53% of open positions are long on Tuesday. In the meantime, 57% of trader set up orders are to buy the metal.

 

[Anastasia DC]

EUR/USD retreats on Wednesday

"Seeing the US$ testing the underside of two long-term channels at the same time creates the potential that the US$ could peak at these levels."
– Chris Kimble, Power of the Pattern (based on investing.com)

Pair's Outlook
The Euro declined on Wednesday morning against the US Dollar, and it could be clearly seen that the currency exchange rate is set to continue the decline. However, this comes after a 1.10% surge in the pair during Tuesday's trading session, which caused the rate's technicals to be reviewed. The common European currency has hit a combined resistance level of two trend lines at 1.0717 against the US Dollar, and as a result the pair is set to fall as low as 1.0625, where the 55-day SMA is located at.

Traders' Sentiment
SWFX traders have become bearish regarding the pair, as 52% of open positions are short on Wednesday. In addition, 60% of trader set up orders are to sell the Euro.

 

[Anastasia DC]

GBP/USD takes a breath after Tuesday's rally

"While the near-term landscape argues for some volatility, we think the chances for GBPUSD to squeeze meaningfully higher are limited." – TD Securities (based on PoundSterlingLive)

Pair's Outlook
On Tuesday the GBP/USD pair experienced the strongest rally in almost 20 years, amid UK May's comments and upbeat UK inflation data. Having surged 363 pips, the Cable fully realised the falling wedge pattern, as its upper trend-line was pierced yesterday. Moreover, the 1.24 major level was retaken, with the 55-day SMA managing to provide sufficient resistance to limit the gains. The same SMA keeps providing resistance today, also being bolstered by the Bollinger band, the monthly PP and the weekly R2, which altogether are likely to cause the Pound to undergo a bearish correction. The weekly R1 at 1.2324 is the closest support, which is expected to limit the possible losses.

Traders' Sentiment
Today 72% of traders are long the Pound (previously 73%), whereas 52% of all pending orders are to sell the Sterling, up from 50%.

 

[Anastasia DC]

USD/JPY attempts to negate Tuesday's losses

"The business side of Japan worries about the political push-back on the weaker yen because of history, I wouldn't really worry about the U.S. policy makers going after a weak currency."
– Allen Sinai, Decision Economics (based on Bloomberg)

Pair's Outlook
With risk-aversion driving the markets yesterday, the USD/JPY currency pair ignored the immediate demand cluster and dropped below the 113.00 mark. Technical indicators keep giving bearish signals in the daily timeframe, but the nearest resistance area is now unlikely to be capable of preventing the Buck from edging higher. As a result, there is nothing holding the US Dollar from rising or falling today, meaning that fundamental events are likely to provide impetus. The Greenback has the potential to reclaim the 114.00 mark and erase yesterday's losses, but downside risks remain, with the weekly S2 at 111.50 being the closest support.

Traders' Sentiment
Traders remain equally divided between bulls and bears, while 70% of all pending orders are to purchase the US Dollar (previously 69%).

 

[Anastasia DC]

Gold falls after reaching resistance

"After a quick push higher right on the open, gold succumbed to some profit taking and producer selling throughout the morning."
– Alex Thorndike, MKS PAMP Group (based on Reuters)

Pair's Outlook
After reaching the high level of 1,219, where a combined resistance by the monthly R2 and 38.20% Fibonacci retracement level is enforced, the yellow metal retreated on Wednesday morning. In the first quarter of the day the bullion also fell below the closes support level at 1,212.87. That means that the metal might fall next to the medium term ascending channel's lower trend line at 1,203.40. In addition, if that support level is passed, the next notable level of significance below gold will be at 1,191.73.

Traders' Sentiment
Traders remain slightly bullish regarding the bullion, as 52% of open SWFX trader positions are long on Wednesday. Meanwhile, 58% of trader set up orders are to buy the metal.

 

[Anastasia DC]

EUR/USD reaches broken channel

"Although such predictions failed to come true, the parity chatter is picking up again as the euro dropped this month to levels not seen since 2003."
– Jason Schenker (Based on Bloomberg)

Pair's Outlook
EUR/USD erased some of Wednesday's losses in a small green candle Thursday morning, hovering between a broken short-term channel and the 55-day SMA of 1.0615. The pair is likely to experience some further volatility during the session amid high impact data announcements, meaning that levels may break both falsely and consistently. We set an ultimate ceiling at 1.0720, the upper trend-line of the senior channel up, while ground lies around 1.0580/78 with possible hitches at 1.0594 before that.

Traders' Sentiment
SWFX traders have become bearish regarding the pair, as 48% of open positions are short on Thursday. In addition, 62% of trader set up orders are to sell the Euro.

 

[Anastasia DC]

GBP/USD gravitates towards 1.23

"The weak daily closing [yesterday] suggests strong downward pressure but at this stage, any further decline appears to be limited to 1.2200."
– UOB Group (based on FXStreet)

Pair's Outlook
The Cable's decline exceeded expectations on Wednesday, as it easily pierced the immediate demand area and found support only at the second target, namely the 20-day SMA. The Pound remains under the risk of falling deeper down, in which case the weekly PP at 1.2181 will be the level to focus one. On the other hand, ahead of Trump's inauguration tomorrow the Sterling has the potential to gain a few pips, reclaiming the 1.23 mark once again and with the immediate resistance, the weekly R1, doubtfully limiting the gains. Technical indicators, however, are unable to confirm either scenario, as all of them are now giving mixed signals.

Traders' Sentiment
Bullish sentiment keeps growing weaker, as 71% of all open positions are now long, compared to 72% on Wednesday.

 

[Anastasia DC]

USD/JPY on the edge of breaking its three-week down-trend

"The upside test above the ¥115-line remains on hold, ahead of Trump's speech, we are seeing an intensifying mood to sit on the fence."
– Tokyo Forex & Ueda Harlow (based on Market Watch)

Pair's Outlook
Fed Yellen's comments on Wednesday provided the US Dollar with a strong boost, which allowed the USD/JPY to erase both Monday's and Tuesday's losses. The pair now faces its three week down-trend, which, technically, could provide sufficient resistance for a U-turn, not to mention the trend-line being bolstered by the weekly PP. Technical studies also support this outlook, but the Greenback could still retain its strength from Janet Yellen's speech, which would result in the down-trend losing its credibility. The next target would then be the 116.10 level, where the 20-day SMA coincides with the monthly PP.

Traders' Sentiment
Market sentiment remains in perfect equilibrium for the third consecutive day, but the number of purchase orders lost 13 percentage points over the day. The orders now take up 57% of the market.

 

[Anastasia DC]

Gold still corrective

"Jan 19 Gold prices were down on Thursday on a strong dollar after Federal Reserve Chair Janet Yellen advocated lifting U.S. interest rates gradually."
– Michael Perry (Based on Reuters)

Pair's Outlook
The daily chart shows Gold being on a retracement of the broken upper boundary of the senior channel down pattern. The pair has additionally broken the junior channel that had to break about a week ago. Ground is set at 1,191.73, because with more risk at 1,184.64/1,181.87, where losses are ultimately to be cut. Resistance lies at 1,198.77 and then 1,211.87 with risk more to the downside rather than above, meaning that the 1,184.64/1,181.87 area is the most appropriate target for today.

Traders' Sentiment
Traders remain slightly bullish regarding the bullion, as 53% of open SWFX trader positions are long on Thursday. Meanwhile, 57% of trader set up orders are to buy the metal.

 

[Anastasia DC]

EUR/USD still inside junior channel

"The European Central Bank's ultra-loose monetary policies will not last forever but it is still too early discuss winding down the bank's bond purchase programme, Executive Board member Benoit Coeure told CNBC on Friday."
– Reuters

Pair's Outlook
EUR/USD opened green on Friday after the pair was denied access to levels below the 55-day SMA of 1.0608 two days before. The motion still should remain on the bearish side due to the ultimate target lying at the channel bottom boundary, even if today closes green, meaning that risk still lies both above and below and the daily theme could reverse. In case the pair attacks the supply area above at 1.0733, there is decent risk that the junior channel will break, due to the recent stickiness of its upper part.

Traders' Sentiment
SWFX traders have become bearish regarding the pair, as 48% of open positions are short on Thursday. In addition, 58% of trader set up orders are to sell the Euro.

 

[Anastasia DC]

GBP/USD in limbo ahead of Trump's inauguration

"The GBP/USD could eventually test 1.25, which we would see as a sell level, that is unless the US dollar extends its correction, which is an unlikely scenario over the medium term, as the solidity of US economic growth will fuel inflation, in turn, the tightening of the Federal Reserve's monetary policy."
– Natixis (based on PoundSterlingLive)

Pair's Outlook
The GBP/USD currency pair confirmed yesterday's scenario, having climbed back above the 1.23 major level and even completely ignoring the immediate resistance at 1.2324. Friday brings a lot of uncertainty, as volatility direction is likely to be caused by Trump's speech during his inauguration later today. From a technical perspective we should see more upside movement, despite a group of strong resistances located just beyond the 1.24 handle. On the other hand, the US Dollar could receive a solid boost, with the Cable seen dropping as low as 1.21 in the worst case scenario.

Traders' Sentiment
Bulls keep retreating, as 69% of all open positions are now long (previously 71%). At the same time, the share of sell orders returned to its Wednesday's level of 52%, down from 55% on Thursday.

 

[Anastasia DC]

USD/JPY takes another shot at breaking the down-trend

"The dollar could fall if Trump pushes forward his protectionist rhetoric in his inauguration speech. Some investors also expect more details on his policies, so the dollar could also slip if Trump does not mention any specifics."
– Bank of Tokyo-Mitsubishi UFJ (based on Reuters)

Pair's Outlook
The USD/JPY currency pair barely edged higher yesterday, therefore, preserved the bearish trend-line. Technically, the US Dollar should weaken against the Japanese Yen today in order for the trend-line to remain credible. The pair faces two relatively strong supports on its path, the monthly S1 and the 20-day SMA around 113.80, and the weekly S1 and the lower Bollinger band just on top of the 113.00 mark. Both this areas could limit the intraday losses, but upside risks are also present today. The main target from above is the second trend-line at 117.44, but first the Greenback is required to climb over the monthly PP at 116.20.

Traders' Sentiment
For the fourth day in a row market sentiment remains in perfect equilibrium. The number of buy orders, however, slid from 57 to 53%.

 

[Anastasia DC]

Decent downside risks for Gold

"Money is moving to bullion as investors seek an alternative after the Yuan sustained its worst annual loss against the dollar in more than two decades."
– Luzi Ann Javier (Based on Bloomberg)

Pair's Outlook
Gold gained some pips to the UD Dollar, following a volatile session the day before, when it posted what appears to be a high wave candle, which expresses confusion in the market. The pair is most likely to be targeting 1,211.87/1,213.17 – an area which corresponds to the bottom broken trend-line of the junior channel and the weekly R1, where the gains will be cut for today's session. There is still risk on the downside as well, due to the fact that a senior broken channel might also require consolidation. In a falling case scenario, 1,184.64/1,182.34 is most likely to make bulls take over after 1,191.73 is tested.

Traders' Sentiment
Traders remain slightly bullish regarding the bullion, as 52% of open SWFX trader positions are long on Friday. Meanwhile, 61% of trader set up orders are to buy the metal.

 

[KristinaDC]

EUR/USD surges to 1.0750 mark

"Some analysts attribute the selloff in the greenback to uncertainty over US president Donald Trump's policies."
- Action Forex (based on investing.com)

Pair's Outlook

On early Monday morning the common European currency surged against the US Dollar, as the currency exchange rate reached the newly calculated first weekly resistance level at 1.0752. However, the pair was stopped by the resistance, which it is most likely to continue to attempt to break through. It is possible that the weekly R1 will be broken, and in such case the rate is set to jump to the 1.08 mark. Although, in case of a bounce off, the pair would fall as low as 1.0666, where the newly calculated pivot point is located at.

Traders' Sentiment

SWFX traders continue to short the Euro, as 53% of trader open positions are short. In addition, 61% of trader set up orders were to sell the Euro.

 

[KristinaDC]

GBP/USD continues to edge higher

"The GBP/USD could eventually test 1.25, which we would see as a sell level, that is unless the US dollar extends its correction, which is an unlikely scenario over the medium term, as the solidity of US economic growth will fuel inflation, in turn, the tightening of the Federal Reserve's monetary policy."
– Natixis (based on PoundSterlingLive)

Pair's Outlook
The Pound managed to end trade in the green zone on Friday, with the upper trend-line of the seven-month descending channel pattern limiting the gains. Today the British currency appears to have retained its post-inauguration strength, attempting to post more gains against the US Dollar. Another rally would imply a breach of the channel's upper border, suggesting that more GBP/USD strength is to follow. The immediate resistance area around 1.2440 is unlikely to hold the Cable from climbing higher, but the second cluster, formed by the 100-day SMA and the weekly R1, has a better chance of succeeding. The base case scenario, however, is a surge not further than 1.25.

Traders' Sentiment
Bulls keep losing numbers, are 68% of all open positions are now long (previously 69%). The share of sell orders remains unchanged at 52%.

 

[KristinaDC]

USD/JPY attempts to remain above 113.00

"We still expect the JPY to continue suffering in an environment with rising global bond yields and a higher oil price and expect USD/JPY to increase further in coming months."
– Danske Bank (based on FXStreet)

Pair's Outlook
Surprisingly, but the USD/JPY currency pair barely experienced any volatility on Friday, having retained its position below the 115.00 handle. The Greenback is now supported by a relatively strong demand area, represented by the weekly PP, the 55-day SMA and the monthly S1, however, the three-week bearish trend-line just above today's opening price appears to be much stronger. As a result, the given pair risks falling back to 113.00, where the weekly S1 and the lower Bollinger band are expected to limit the losses. Technical studies are also in favour of the negative outcome.

Traders' Sentiment
Bulls and bears broke out of equilibrium, as 52% of all open positions are now short and the remaining 48% are long. At the same time, the number of purchase orders slid from 53 to 51%.