Daily Technical Analysis for Majors by Dukascopy

[KristinaDC]

EUR/USD finds support at 1.06 mark

"It's Le Pen's anti-euro stance that's worrying."
– Mark Gilbert, Bloomberg

Pair's Outlook
As it was forecasted before, the common European currency found support against the US Dollar in the 55-day simple moving average, which on Tuesday was at 1.0604 level. However, the forecast of a decline of the Euro against the Greenback still remains intact, as the latest rebound is seen as a consolidation after three consecutive trading sessions of losses for the Euro. The next level, where the pair will be heading is the weekly S1, which is located at 1.0568. Although, it is unclear where exactly the rate will encounter resistance, which will propel it lower.

Traders' Sentiment
SWFX traders have not changed their opinion, as 51% of open positions are long on Tuesday. In the meantime, 58% of trader set up orders are to sell the Euro.

 

[KristinaDC]

GBP/USD attempts to remain above 1.25

"We were heavily underweight (on sterling) but we have now eased that to a neutral stance."
– Lombard Odier (based on Business Recorder)

Pair's Outlook
The GBP/USD currency pair resumed trade in its consolidation trend on Monday, climbing back above the 1.25 handle. Since the Sterling keeps gravitating towards the 1.25 mark, a bearish development today would not be a surprise. However, the 20-day SMA kept providing the Cable with rather strong support lately, and with the help of the weekly PP, could spark more GBP-buying. Fundamental data might also provide a boost, providing the Pound with the opportunity to reach the 1.26 major level, with the weekly R1 being the closest resistance there. Technical studies, on the other hand, are unable to confirm either scenario.

Traders' Sentiment
Both bullish market sentiment and the share of sell orders slid 1% point over the day, now taking up 61% and 54% of the market, respectively.

 

[KristinaDC]

USD/JPY: downside pressure remains

"The news [Michael Flynn's resignation] weighed on the dollar against the yen because it's a hard situation to understand, and also to understand what kind of broader fallout it will have."
– Sony Financial Holdings (based on Reuters)

Pair's Outlook
Despite all odds, the USD/JPY currency pair inched higher on Monday, breaching our bearish trend-line. An adjustment is not yet required, as a negative outcome today would still reinstate it. The 20-day SMA is the nearest support, but more attention should be paid to the weekly pivot point, which is located at 112.89. Moreover, the Buck is likely to experience trouble with further gains, as a number of strong resistance areas rests up to the 115.50 level. A successful surge beyond this mark would open the door for reaching the main target, namely the longer-term trend-line, which currently lies on top of the 118.00 level.

Traders' Sentiment
There are 55% of traders with a positive outlook towards the US Dollar today (previously 58%). Meanwhile, the portion of purchase orders remains unchanged at 56%.

 

[KristinaDC]

Gold recoups losses on Tuesday morning

"I would not expect to see much volatility, don't think anyone is really confident enough to put on any sort of directional trades at the moment until they hear from Yellen."
– Daniel Hynes, ANZ (based on Reuters)

Pair's Outlook
The yellow metal was in a rebound on Tuesday morning, as it had found support during the late hours of Monday's trading session near the 1,220 level. The move was expected, and occurred exactly as forecasted. However, the future movements of the bullion is rather unclear due to a fundamental factor, as chairwoman of the Fed, Janet Yellen, is set to speak in the second half of Tuesday's trading session. Her comments are likely to drive the bullion's prices, as she comments on US monetary policy.

Traders' Sentiment
Traders remain long, as 54% of traders open positions are long. Meanwhile, 56% of trader set up orders are to buy the metal.

 

[KristinaDC]

EUR/USD marks a week of losses

"Euro should remain compressed against most other pairs."
- Saed Abukarsh, Ark Capital Management (based on Bloomberg)

Pair's Outlook
The common European currency continues its path lower against the US Dollar, as the currency exchange rate continues exactly as forecasted. The pair has reached the weekly S1, which is located at 1.0568. The rate has found support in the weekly level of significance. However, it is clear that the Euro weakness is set to continue to fall. In that case the closest notable support level will be located at 1.0496. Although, it is most likely that the currency exchange rate will fluctuate above the recently found support for some time before continuing the set path.

Traders' Sentiment
SWFX traders remain neutral bullish, as 52% of trader set up orders are long on Wednesday. In the meantime, 60% of trader set up orders are to sell the Euro.

 

[KristinaDC]

GBP/USD retests 1.2450 support

"We think that a continued improvement in US economic data and a Fed that acknowledges this should push the USD back into its uptrend."
– Morgan Stanley (based on PoundSterlingLive)

Pair's Outlook
The Cable behaved mostly according to expectations on Tuesday, as it experienced another decline, but stabilised below the immediate support area. Since the GBP/USD pair still remains in its consolidation trend, the most logical outcome today would be a rally back towards the 1.25 level or even higher. A drop lower is also possible, but with a close above the 1.2450 level, as it kept the Sterling afloat since mid-January. Moreover, the monthly PP, the 55 and the 100-day SMAs form a tough demand cluster just below the 1.2450 mark, also suggesting a strong bearish development is far-fetched. Meanwhile, technical indicators are in favour of the positive outcome.

Traders' Sentiment
There are 60% of traders with a positive outlook towards the Pound today, but 56% of all pending orders are to sell the British currency.

 

[KristinaDC]

USD/JPY sets eye on 115.00

"The dollar/yen was weak last week, so investors bought back the dollar on Yellen's comments."
– BBH (based on Reuters)

Pair's Outlook
The American Dollar managed to erase all intraday losses against the Japanese Yen yesterday and even climb over the 114.00 mark, thus, breaking its seven-week bearish trend. The US Dollar now has the potential to post more gains and reach the 115.00 major level, but a surge beyond this level could be difficult to achieve, as the 55-day SMA, the weekly R2 and the upper Bollinger band form a strong resistance area around 115.15. Technical indicators in the daily timeframe also suggest the Buck could post losses today. Setbacks are now expected until the USD/JPY pair reaches the 21-month bearish trend-line near 118.00.

Traders' Sentiment
Bulls are barely outnumbering the bears, taking up 51% of the market (previously 55%). The share of buy orders increased from 56 to 58%.

 

[KristinaDC]

Gold remains near 1,220 level

"The focus is really on the U.S. fiscal policy. And if that stokes up the inflation expectations, we expect gold to suffer and consolidate for a while."
– Richard Xu, HuaAn Gold (based on Reuters)

Pair's Outlook
The yellow metal remained near the 1,220 mark on Wednesday morning. The reason for that is that the markets have still not decided upon the future direction of the commodity price. In the meantime, from a technical perspective all of the bullion's recent moves have been dictated by two levels of significance on the daily chart. From the upside the metal is kept lower by the weekly PP at 1,232.24, and from the downside the bullion is finding support in the first weekly support at 1,219.77 combined with the 38.20% Fibonacci retracement level at 1,219.20.

Traders' Sentiment
Traders remain long on the pair, as 54% of trader open positions are long on Wednesday. Meanwhile, 55% of trader set up orders are to buy the metal.

 

[KristinaDC]

Gold remains near 1,220 level

"The focus is really on the U.S. fiscal policy. And if that stokes up the inflation expectations, we expect gold to suffer and consolidate for a while."
– Richard Xu, HuaAn Gold (based on Reuters)

Pair's Outlook
The yellow metal remained near the 1,220 mark on Wednesday morning. The reason for that is that the markets have still not decided upon the future direction of the commodity price. In the meantime, from a technical perspective all of the bullion's recent moves have been dictated by two levels of significance on the daily chart. From the upside the metal is kept lower by the weekly PP at 1,232.24, and from the downside the bullion is finding support in the first weekly support at 1,219.77 combined with the 38.20% Fibonacci retracement level at 1,219.20.

Traders' Sentiment
Traders remain long on the pair, as 54% of trader open positions are long on Wednesday. Meanwhile, 55% of trader set up orders are to buy the metal.

 

[KristinaDC]

EUR/USD continues rebound on Thursday

"Wednesday's U.S. dollar ended the day unchanged-to-lower against all of the major currencies."
- Kathy Lien, BK Asset Management (based on investing.com)

Pair's Outlook
During the early hours of Thursday's trading session the common European currency surged against the US Dollar. The currency exchange rate was continuing the rebound, which began during the second part of Wednesday's trading session. In addition, due to the fact that the pair managed to break through the resistance put up by the 55-day SMA at 1.0602 level, it is most likely that the surge will continue up to the monthly PP, which is located at 1.0650 level. However, it is unlikely that the monthly PP's resistance will be broken, as it is also strengthened by the 20-day SMA at 1.0657.

Traders' Sentiment
Traders are bullish on the pair, as 53% of SWFX open positions are long. In the meantime, SWFX trader set up pending commands are bearish, as 60% of trader set up orders are set up to sell the Euro.

 

[KristinaDC]

GBP/USD poised to begin recovering

"The dollar is struggling as U.S. Treasury yields retreated from highs."
– JP Morgan Chase Bank (based on Reuters)

Pair's Outlook
Even though the GBP/USD currency pair experienced strong downside volatility on Wednesday, it still managed to close above the 1.2460 psychological support. Assuming the given support level remains strong the Cable should now edge higher, ignoring the immediate resistance, namely the weekly PP at 1.2474. Instead, attention should be paid to the 20-day SMA, which rests around 1.2521, but the intraday ceiling could even be the 1.2550 mark—also a psychological level. Meanwhile, technical indicators support the possibility of the positive outcome and an additional purchase signal was provided two days ago, when the 55-day SMA climbed over the 100-day one.

Traders' Sentiment
Bullish sentiment still holds more or less at the same level, taking up 61% of the market today. The share of sell orders slid from 56 to 53%.

 

[KristinaDC]

USD/JPY to suffer another setback

"We did flip two weeks ago to a modest net short against the franc and the yen. Chances are the dollar, as it has been doing in recent weeks, will drift around in a tight consolidative range."
– JP Morgan (based on Business Recorder)

Pair's Outlook
As was anticipated, the US Dollar failed to outperform the Yen yesterday, although upside volatility did stretch out to the 115.00 level. Ultimately, the pair remained relatively unchanged, posting an insignificant loss, but a full-blown failure is not the case. Due to the recent breach of a seven-month down-trend, the USD/JPY pair still has the opportunity to soar towards 118.00 within a month. The only solid obstacle on the pair's path is the resistance circa 115.10, represented by the 55-day SMA, the monthly R2 and the upper Bollinger band. Today, however, the Buck is expected to struggle at climbing over the weekly R1 and monthly PP resistance area.

Traders' Sentiment
There are 56% of traders holding long positions today (previously 51%). At the same time, the portion of buy orders declined from 58 to 55%.

 

[KristinaDC]

Gold trades above 1,235

"Soros Fund Management LLC got out of gold in the fourth quarter of 2016."
– Marcy Nicholson, Reuters

Pair's Outlook
The yellow metal surged on Thursday, as the bullion found support on Wednesday and continued the surge during the early hours of Thursday's trading session. The rebound occurred against the 20-day SMA at 1,216.26, and the bullion managed to reach above the 1,235 level during today's trading. However, this might be the end of the surge, as the commodity price faces the combined resistance of the monthly R1 at 1,237.68 and the upper trend line of the long term descending channel pattern at 1,238.67.

Traders' Sentiment
SWFX traders remain long on the bullion, as 54% of trader open positions are long on Thursday. Meanwhile, 60% of trader set up orders are to buy the bullion.

 

[KristinaDC]

EUR/USD consolidates on Friday

"The euro may well survive this year's wave of elections and populist calls for a return to national currencies."
- Jean-Michel Paul, Bloomberg

Pair's Outlook
After unexpectedly jumping during the second half of Thursday's trading session, the common European currency consolidated its position against the US Dollar on Friday morning. The future direction of the currency pair is still unclear. However, there are two possible scenarios for the future. First of all, the rate might break the weekly PP at 1.0680 and surge as far as the 1.0733 level, where the 100-day SMA is located at. On the other hand, the rate might retreat to the monthly PP at 1.0650. To do that, the pair would need to pass the support provided by the 20-day SMA at 1.0663.

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

 

[KristinaDC]

GBP/USD gravitates towards 1.25

"GBP/USD continues to consolidate at its 55 day ma at 1.2426, we maintain a negative bias but patience is needed. A close below here will introduce potential to the 1.2253 the 18th January low."
– Commerzbank (based on FXStreet)

Pair's Outlook
As was anticipated, the GBP/USD pair was able to reach the 20-day SMA on Thursday, however, was unable to maintain trade at its level, ultimately retreating and closing with a 28-pip rally. The Sterling is likely to post more gains, as that would reconfirm the Cable's current consolidation trend today. The 1.2550 level is expected to be the ceiling, assuming the 20-day SMA will be overcome. Technical indicators, on the other hand, are unable to confirm the possibility of the positive outcome, as they are giving mixed signals. Another leg down is possible, but with the 1.2460/40 area, a strong psychological support, remaining intact.

Traders' Sentiment
Today 59% of traders are long the Pound, compared to 61% on Thursday. The buy and the sell order ratio is now equal to one.

 

[KristinaDC]

USD/JPY in limbo around 113.20

"The dollar needs a pretty much strong buying incentive to make certain the Fed's rate increases three times this year."
– Bank of Mitsubishi UFJ (based on Market Watch)

Pair's Outlook
The US Dollar failed to outperform the Japanese Yen on Thursday, despite upbeat US fundamentals. Investors took profit of the recent rally, causing the Buck to erase Monday's and Tuesday's gains. The pair remains on the back foot, risking to drop under the 113.00 major level today, with the weekly pivot point at 112.89 acting as the closest support. Contrariwise, a technical correction could occur after yesterday's relatively sharp decline, with the interim target still being the 115.00 mark, where the upper Bollinger band, the 55-day SMA and the weekly R2 form a tough supply area.

Traders' Sentiment
There are now 55% of traders with a positive outlook towards the US Dollar today (previously 56%). At the same time, the number of orders to acquire the Greenback inched up from 55 to 57%.

 

[KristinaDC]

Gold remains above 1,235 level

"We don't expect much in the way of market movements going into Friday's session, but gold should nevertheless see something of a bid heading into the weekend."
– Edward Meir, INTL FCStone (based on Reuters)

Pair's Outlook
The yellow metal traded rather flat on Friday morning, as it found support in the monthly R1, which is located at 1,237.68. The bullion retreated to that level after it stopped and reversed its surge in the second half of Thursday's trading session. Gold has two possible future scenarios. Either the bullion finds enough strength in the support level to rebound and approach the 1,245 level, or the yellow metal will fail at that and begin a move lower. A move lower would result in a fall to the weekly PP, which is located at 1,232.24.

Traders' Sentiment
Traders are long on the metal, as 55% of SWFX trader open positions are bullish. In addition, 57% of trader set up orders are to buy the bullion.

 

[KristinaDC]

EUR/USD returns to 1.06 level

"Germany has a significant bilateral trade surplus with the U.S., a material current account surplus, but it has not engaged in persistent one-sided intervention in the foreign exchange market."
– Mario Draghi, ECB (based on Bloomberg)

Pair's Outlook
The common European currency had retreated to the 1.06 level against the US Dollar on Monday morning. At that level the currency exchange rate managed to find support, as the 55-day SMA, which is located exactly at 1.06, is now also supported by the weekly PP at 1.0604. It is highly possible that the currency pair will surge during the session up to the monthly PP, which is located at 1.0650. The monthly PP, which previously failed to play a notable role, on Monday is strengthened by the 20-day SMA at 1.0654. Due to that reason it is unlikely that the resistance will be broken.

Traders' Sentiment
SWFX traders remain neutral bullish on the pair, as 51% of trader open positions are long on Monday. Meanwhile, 63% of trader set up orders are to sell the Euro.

 

[KristinaDC]

GBP/USD attempts to erase Friday's losses

"GBPUSD is sending mixed signals. The pair briefly dipped under its 50-day average near $1.2410 testing $1.2390 before bouncing back toward $1.2430. While this looks like a successful retest, RSI breaking under 50 suggests momentum turning downward."
– CMC Markets (based on PoundSterlingLive)

Pair's Outlook
The Cable edged lower on Friday, with the psychological support around 1.2460/40 failing to limit the losses, but the demand cluster circa 1.2420 succeeding. However, the GBP/USD pair opened with a small bearish gap today, causing the mentioned demand area to be pierced. This does not imply the Sterling is doomed to keep falling; the price is still expected to recover, with the nearest meaningful resistance being at 1.2449, represented by the weekly PP. Nevertheless, the weekly PP is unlikely to hold the Pound for long, even though technical studies are unable to confirm a recovery is due.

Traders' Sentiment
There a 59% of traders with a positive outlook towards the Sterling today, unchanged since Friday. At the same time, the portion of sell orders inched up from 50 to 55%.

 

[KristinaDC]

USD/JPY anchored around 113.00

"As confidence in the dollar weakens with more articles and headlines like those in recent days and weeks, a tipping-point is on the horizon at which investors collectively realize they are at significant risk of being on the wrong side of a potentially large move."
– A.G. Bisset Associates (based on Bloomberg)

Pair's Outlook
The USD/JPY currency pair followed a less positive for the Greenback path on Friday, having fallen under the 113.00 threshold after successfully maintaining trade above it for a whole week. The given pair still remains in a consolidation trend, meaning there is sufficient room for a decline towards 111.75 today, where the weekly S1 and the lower Bollinger band form support. On the other hand, a rally is also possible, with the 115.00 level being the main target, but with the 20-day SMA and the weekly PP representing immediate resistance circa 113.40 and another obstacle located around 114.40. Meanwhile, technical indicators are unable to confirm the possibility of either scenario.

Traders' Sentiment
Today 57% of all open positions are long (previously 55%), whereas 59% of all pending orders are to acquire the US Dollar, up from 57%.