Daily Technical Analysis for Majors by Dukascopy

[KristinaDC]

EUR/USD meets resistance on Wednesday

"The 240-minute EUR/USD chart is rallying from a head and shoulders bottom. If the bulls get a breakout, the targets are a measured move up and a 50% correction."
– Al Brooks, Brooks Price Action (based on investing.com)

Pair's Outlook
The common European currency has reached the resistance put up by the weekly R2 at 1.0729 against the US Dollar. On Wednesday morning the currency exchange rate was in a slight retreat, as a consolidation of positions was occurring after the almost 100 base point surge of Tuesday. There are two possible short term outcomes for the pair. It can soon resume the surge and set its eyes on the weekly R3, which is located at the 1.0780 level. On the other hand the pair might bounce off the weekly R2 and retreat back to the combined support of the 20-day SMA at 1.0690 and the monthly PP at 1.0686.

Traders' Sentiment
SWFX traders have shifted their positions, as 51% of open positions are short on Wednesday, compared to 51% long on Tuesday. Meanwhile, 53% of set up orders are to sell.

 

[KristinaDC]

GBP/USD to take a breath after Wednesday's rally

"The USD side also looks supportive for further gains in cable, which reflects softer US data surprises, a longer timeline for fiscal reform and a shift in Fed pricing."
– TD Securities (based on FXStreet)

Pair's Outlook
UK Prime Minister May's surprise announcement on Wednesday lifted the Sterling, allowing it to gain more than 270 pips against the US Dollar. The six-month down-trend can now be called completely breached, since the resistance cluster around 1.2610 was also easily pierced. However, the Pound encountered some resistance around the 1.29 handle, which is now the new Cable's new target. From this point on the British currency is likely to begin sliding down, undergoing a correction, but the monthly R1 at 1.2743 is expected to provide sufficient support to keep the pair elevated.

Traders' Sentiment
Market sentiment remains equally divided between the bulls and the bears, while the share of purchase orders inched higher, namely from 49 to 51%.

 

[KristinaDC]

USD/JPY attempts to regain bullish momentum

"We still think the dollar is going to strengthen over time based on the outlook for US monetary policy... but for now, with markets not heavily focused on monetary policy, it could explain this consolidation (for the greenback)."
– Wells Fargo (based on Business Recorder)

Pair's Outlook
The Greenback was unable to outperform the Japanese currency yesterday, which resulted in a failure to preserve the descending channel pattern. Nevertheless, the Buck is not ready to give up and is likely to take another shot at pushing higher in order to settle above the channel's support line. The 200-day SMA is unlikely to provide resistance at this point, but the monthly S1 at 108.17 is the level to focus on, as it prevented the US Dollar from edging higher four times now. Meanwhile, technical indicators are unable to confirm the possibility of the positive outcome, but signals are no longer bearish.

Traders' Sentiment
Market sentiment remains strongly bullish, as 72% of all open positions are long (previously 73%). The number of orders to acquire the Buck edged down from 62 to 58%.

 

[KristinaDC]

Gold trades below 1,290 mark

"The whole situation for gold is more than optimistic because of the geopolitical tensions aroused by North Korea and with the interest rate hike expectations coming down."
– Mark To, Wing Fung Financial Group (based on Reuters)

Pair's Outlook
On Wednesday morning the yellow metal's price was in a retreat just below the 1,290 mark, where the commodity price has been since the higher opening of Monday's trading session. During the second half of Tuesday's trading the bullion's surge was suddenly stopped by a market participant selling around 20 000 futures contracts. That forced the metal to retreat and find support in the 61.80% Fibonacci retracement level, which is located at the 1,278.73 level. It is most likely that this level will continue to provide support to the metal, as it is still expected that the bullion will reach the 1,300 mark.

Traders' Sentiment
Traders are bearish on the metal, as 55% of open positions are short. However, 64% of trader set up orders are to buy the bullion.

 

[KristinaDC]

EUR/USD remains below resistance

"Twenty-five Nobel Prize-winning economists have united to warn far-right candidate Marine Le Pen against using their ideas to campaign against the euro and the European Union in her bid for the French presidency."
– John Follain, Bloomberg

Pair's Outlook
On Thursday morning the common European currency against the Greenback remained below the second weekly resistance, which stopped the pair's Tuesday's jump. The resistance level is located at the 1.0729 mark. It is possible that the currency exchange rate will retreat to the 1.0687 level, where the 20-day SMA together with the monthly PP are located at. On the other hand a break of the weekly R2 would free up the range up to the weekly R3, which is located at the 1.0780 level. However, most likely the pair will remain at the current levels, as the markets are expecting the French presidential elections.

Traders' Sentiment
Traders remain bearish, as 53% of open positions are short. However, 54% of trader set up orders are to buy the Euro.

 

[KristinaDC]

GBP/USD struggles to remain at seven-month high

"The USD side also looks supportive for further gains in cable, which reflects softer US data surprises, a longer timeline for fiscal reform and a shift in Fed pricing."
– TD Securities (based on FXStreet)

Pair's Outlook
As was anticipated, the GBP/USD currency pair underwent a correction on Wednesday, passing through only the immediate support, namely the weekly R3. According to technical studies, the Cable should continue to weaken today, with the upper Bollinger band and the weekly R3 now acting as a relatively strong resistance area. In case bears do take over the market, the Sterling would risk slipping under 1.27, despite the weekly R2 providing support around that area. Ultimately, a plunge towards 1.2620 is possible, as geopolitical factors keep weighing on the given pair. On the other hand, another leg up is unlikely to cause the 1.2850 mark to get pierced today.

Traders' Sentiment
Today both the market sentiment and all pending orders reached a perfect equilibrium.

 

[KristinaDC]

USD/JPY anchored around the 200-day SMA

"We still think the dollar is going to strengthen over time based on the outlook for US monetary policy... but for now, with markets not heavily focused on monetary policy, it could explain this consolidation (for the greenback)."
– Wells Fargo (based on Business Recorder)

Pair's Outlook
The US Dollar managed to appreciate against the Yen on Wednesday, with the monthly S1 limiting upside volatility. Ultimately, trade closed in front of the 200-day SMA, but this level remains an unreliable resistance. Nevertheless, the Buck is still unlikely to post significant gains, as supply, represented by the monthly S1, is still intact. However, the RSI indicator suggests the Greenback is to keep recovering, thus, preserving the descending channel pattern. Overall, the majority of signals are bullish, despite other bearish signs. A lot of uncertainty is currently surrounding the USD/JPY, especially since political events and factors continue to pressure the US currency.

Traders' Sentiment
Nearly three quarters (74%) of all open positions are long today, whereas 57% of all pending orders are to acquire the Buck.

 

[KristinaDC]

Gold trades above retracement level

"It appears that large fund selling in the Far East overnight is also putting pressure on the price of gold, and this move has kept the Wall Street gold traders guarding their long positions."
– Walter Pehowich, Dillon Gage Metals (based on Reuters)

Pair's Outlook
As forecasted before the yellow metal has retreated to the support of the 61.80% Fibonacci retracement level, above which it remained on Thursday morning. The retracement level is located at the 1,278.73 level. It is supported by the monthly R1 at 1,275.52 and the weekly PP at 1,274.84. It is most likely that after finding support during the late hours of Wednesday trading the bullion's price will resume the surge, which was stopped short before reaching the 1,300 mark. The reason for that is the fact that there are no resistance levels up to the 1,300 level.

Traders' Sentiment
SWFX traders are bearish on the metal, as 56% of open positions are short. However, 64% of trader set up orders are to buy the metal.

 

[KristinaDC]

EUR/USD back below weekly R2

"Both Le Pen and Melenchon represent a risk for markets, but Melenchon would be more disruptive for the French economy than Le Pen."
– Frederic Leroux, Carmignac Gestion (based on Bloomberg)

Pair's Outlook
On Friday morning the common European currency against the US Dollar traded once more below the weekly R2, which is located at the 1.0729 level. The reason for that is the fact that the resistance put up by the weekly R3 at 1.0780 held its ground on Thursday. It is most likely that large fluctuations in the currency pair would not occur during today's trading session, as the French presidential elections will be held on Sunday. These elections are the main focus now for Euro traders, and the results are sure to cause a fundamental shift in the currency pricing.

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

 

[KristinaDC]

EUR/USD back below weekly R2

"Both Le Pen and Melenchon represent a risk for markets, but Melenchon would be more disruptive for the French economy than Le Pen."
– Frederic Leroux, Carmignac Gestion (based on Bloomberg)

Pair's Outlook
On Friday morning the common European currency against the US Dollar traded once more below the weekly R2, which is located at the 1.0729 level. The reason for that is the fact that the resistance put up by the weekly R3 at 1.0780 held its ground on Thursday. It is most likely that large fluctuations in the currency pair would not occur during today's trading session, as the French presidential elections will be held on Sunday. These elections are the main focus now for Euro traders, and the results are sure to cause a fundamental shift in the currency pricing.

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

 

[KristinaDC]

GBP/USD in orbit around 1.28

"Rising global inflation should have little impact on GBP, we think, since the BoE is not expected to change policy anytime soon."
– Morgan Stanley (based on PoundSterlingLive)

Pair's Outlook
A failure to edge lower on Thursday suggested that the Cable has entered a period of consolidation and is likely to remain within its current trading range today, namely between 1.2750 and 1.29. From a broad technical perspective, another rally is unlikely, due to the weekly R3 and the upper Bollinger band forming resistance just above today's opening price, while the nearest support rests only at 1.2743, represented by the monthly R1. Furthermore, the GBP/USD pair appears to be gravitating towards the 1.28 mark, which also implies another leg down today is more probable. Meanwhile, technical indicators are giving mixed signals in the daily timeframe.

Traders' Sentiment
For the fourth day in a row the bull and the bear ratio remains equal to one. At the same time, the share of buy orders surged from 50 to 57%.

 

[KristinaDC]

USD/JPY sets eye on 110.00

"It is too early to expect a sustained rebound and USD is more likely to trade sideways between 108.20 and 109.80 for now even though the immediate bias is for a probe higher towards the top of the expected consolidation range at 109.80."
– UOB Group (based on FXStreet)

Pair's Outlook
The Buck strengthened on Thursday, adding just under 50 pips against the Yen, thus, prolonging the descending channel pattern. The immediate resistance was also pierced, which now turned into supports, bolstering the channel's lower border. According to daily technical indicators, the USD/JPY pair risks experiencing another leg down and could retest the channel's support line. On the other hand, sufficient demand around the 109.00 mark could help the Greenback recover further, but with the 110.00 expected to be the intraday ceiling.

Traders' Sentiment
Bullish traders' sentiment returned to its Wednesday's level of 72%, compared to 74% on Thursday. The portion of orders to acquire the Buck added 8%points. The orders now take up 65% of the market.

 

[KristinaDC]

Gold remains above retracement level

"I would expect investors to stay on the fence... they would likely be market-watching rather than market-trading ahead of the French elections on Sunday, especially when there is no clarity."
– Barnabas Gan, OCBC (based on Reuters)

Pair's Outlook
During the early hours of Friday's trading session the yellow metal continued to trade above the 61.80% Fibonacci retracement level, which is located at the 1,278.73 level. The bullion has lost its momentum due to the fact that the markets are expecting the results of the French presidential election on Sunday. Meanwhile, from a technical perspective, a medium term ascending channel's lower trend line had closed in on the commodity price from the downside. The trend line was located at the 1,276.95 level on Friday.

Traders' Sentiment
Traders are shorting the metal, as 57% of open positions are short. However, 64% of trader set up orders are to buy the metal.

 

[KristinaDC]

EUR/USD opens above 1.09 mark

"French voters face two radically different visions of the country's future after centrist Emmanuel Macron and far-right nationalist Marine Le Pen won the first round."
– Bloomberg

Pair's Outlook
Due to the French election induced certainty in the Euro the EUR/USD currency exchange rate began the week at 1.0923, which is almost 200 base points higher than the Friday's closing price. Although this is a fundamental shift, the move is still consistent with the large scale ascending channel pattern, as the upper trend line of the channel has not been reached. On Monday morning profit taking was occurring, as the rate had dropped down to the 1.0826 level. It is most likely that the rate will soon find support and stop before the future direction is revealed.

Traders' Sentiment
SWFX traders are bearish on the pair, as 56% of open positions are short. Meanwhile, 52% of set up orders are to sell the Euro.

 

[KristinaDC]

GBP/USD keeps gravitating towards 1.28

"We read the technical indicators as suggesting there is scope for addition gains, but suspect the $1.3000-$1.3050 may be difficult to overcome."
– BBH (based on FXStreet)

Pair's Outlook
Downbeat UK Retail Sales were unable to relieve the British Pound of its strength, as it erased all intraday losses and held its positions above the 1.28 against the US Dollar on Friday. However, further upside momentum seems unlikely, as the 1.2850 level keeps providing relatively strong psychological resistance, now also bolstered by the upper Bollinger band. At the same time, a sharp bearish development is doubtful, due to the weekly PP and the monthly R1 forming a tough demand area at 1.2745. Until a solid market mover is presented the Cable is expected to remain within this trading range, namely between 1.2750 and 1.2850.

Traders' Sentiment
Market sentiment remains in perfect equilibrium today, but the share of buy orders is higher—taking up 60% of the market (previously 57%).

 

[KristinaDC]

USD/JPY to hold above 110.00

"Should the yen be bought, if the Korean situation is so nearby? But buying the yen seems to be the established market reaction, and if you've been around long enough, you know you don't go against the market."
– State Street Bank and Trust (based on Reuters)

Pair's Outlook
The USD/JPY currency pair remained relatively unchanged on Friday, retaining its position above the 109.00 mark. However, on Sunday the French election first round's results allowed the risk-on mood to prevail and boosted the US Treasury yields, causing the pair to open with a strong bullish gap today. Despite this gap, a technical correction is likely to take place, with investors taking profit of the recent rally. Technical indicators also suggest the Greenback is to weaken against the Yen today, but price is expected to close above the 110.00 threshold, despite strong downside volatility. The election surge ultimately was a good sign for the USD/JPY, as it preserved the channel pattern.

Traders' Sentiment
There are 69% of traders holding long positions today (previously 72%), whereas only 58% of all pending orders are to acquire the US Dollar.

 

[KristinaDC]

Gold trades near 1,270 on Monday

"Gold fell nearly 1 percent on Monday to its weakest in two weeks after centrist Macron led the first round of voting in the French presidential election."
– Swati Verma, Reuters

Pair's Outlook
On Monday morning the yellow metal was recovering after the low opening and fall caused by the French presidential election. The bullion almost touched the 1,265 mark before it rebounded and surged up to the 1,275 level, where close by two resistance levels are located at. However, the yellow metal's price still remains in the borders of a medium scale ascending channel pattern. The commodity price has touched the lower trend line of the channel, which means that the bullion is likely to surge in the near future.

Traders' Sentiment
SWFX market sentiment remains bearish, as 56% of open positions are short. However, 65% of trader set up orders are to buy.

 

[KristinaDC]

EUR/USD stays below resistance


"The euro was steady, maintaining gains of about 1.2 percent after the French presidential vote led to a run-off between centrist Emmanuel Macron and National Front candidate Marine Le Pen."
– Dennis Pettit and Alexandria Arnold, Bloomberg

Pair's Outlook
The common European currency remained almost unchanged on Tuesday morning against the US Dollar, as the currency exchange rate traded near the 1.0860 mark. The currency exchange rate was located below the combined resistance of the monthly R1 at 1.0876 and the weekly R2 at 1.0878. This resistance level has kept the pair lower since the consolidation, which followed in the aftermath of the first round of the French Election. It is highly possible that the pair will remain almost unchanged by the end of the day, as it still remains above the upper Bollinger band.

Traders' Sentiment
Traders remain bearish on the pair, as 58% of open positions are short. Meanwhile, 52% of trader set up orders are to sell the Euro.

 

[KristinaDC]

GBP/USD stuck between 1.2750 and 1.2850

"We read the technical indicators as suggesting there is scope for addition gains, but suspect the $1.3000-$1.3050 may be difficult to overcome."
– BBH (based on FXStreet)

Pair's Outlook
As was anticipated, the Sterling began the week on the back foot, having lost 45 pips against the US Dollar yesterday. The decline was a good sign, as it confirmed the Cable's current consolidation trend, which began after last week's strong 278-pip surge. The GBP/USD pair remains anchored to the 1.28 major level, thus, no significant development is expected to occur today. However, according to technical indicators, the bullish momentum today is likely to prevail, but with the 1.2850 mark still being the intraday ceiling, as it marks the consolidation trend's upper boundary.

Traders' Sentiment
Bulls and bears finally broke out of equilibrium, but market sentiment still remains neutral, with 51% of all open positions being long. Meanwhile, the number of purchase orders remains unchanged at 60%.

 

[KristinaDC]

USD/JPY en route to 111.00

"Should the yen be bought, if the Korean situation is so nearby? But buying the yen seems to be the established market reaction, and if you've been around long enough, you know you don't go against the market."
– State Street Bank and Trust (based on Reuters)

Pair's Outlook
The Greenback underwent a corrective decline on Monday, but the losses against the Yen slightly exceeded expectations, as trade closed below the 110.00 major level. Where the given psychological support failed, the weekly R1 at 109.71 succeeded, but that does not imply that bulls are to continue pushing the Buck further up. Downside risks still persist and technical indicators support that. Nevertheless, in case the USD/JPY slips below 109.50, the tough demand cluster around 109.00 is expected to cause the pair to rebound. On the other hand, the nearest significant resistance rests only at 111.00, therefore, the US Dollar has sufficient space for a bullish development today.

Traders' Sentiment
Today 68% of traders are long the Buck (previously 69%), while the share of buy orders edged higher from 58 to 60%.