Daily Technical Analysis for Majors by Dukascopy

[KristinaDC]

EUR/USD trades below 1.09 on Wednesday


"The dollar slid on Wednesday and the perceived safe-haven yen gained after U.S. President Donald Trump abruptly fired FBI Director James Comey in a move that shocked Washington and piqued investors' aversion to risk."
– Mansoor Mohiuddin, NatWest Markets (based on Bloomberg)

Pair's outlook
On Wednesday morning the common European currency was regaining some of its losses against the US Dollar, as the currency exchange rate traded just below the 1.09 mark. The currency pair was still set to decline down to the strong support cluster below it. The cluster consists of the weekly S2 at 1.0833, 20 and 200-day SMAs at 1.0830 and the 38.20% Fibonacci retracement level, which is located at the 1.0826 mark. However, before that cluster is reached the rate might surge to the resistance put up by the weekly S1 at 1.0916.

Traders' sentiment
SWFX traders have not changed their opinion since Tuesday, as 39% of open positions are long and 54% of trader set up orders are to sell.

 

[KristinaDC]

Gold bounces higher on fundamentals

"We think that gold's slide could perhaps extend to $1,180 to $1,200, an area of good technical support."
– Edward Meri, INTL FCStone (based on Reuters)

Pair's outlook
Although the yellow metal had passed the support cluster near the 1,220 mark on Tuesday, it traded back above it on Wednesday morning. The reason for the sudden rebound, which occurred late in the Tuesday's session, was the slight decline of the US Dollar caused by US President Donald Trump firing the Director of FBI. However, the yellow metal is still set to decline, and yesterday's move showed that the support cluster can be passed. Due to that it is assumed that the cluster at 1,220 will be passed and the bullion will decline down to the weekly S1, which is located at the 1,212.68 mark.

Traders' sentiment
Traders remain neutral on the metal. However, 65% of SWFX trader set up orders are to buy the metal.

 

[KristinaDC]

GBP/USD strong above 1.2930


"The improved optimism regarding the macro fundamentals are supportive of a stronger US dollar in the current circumstances."
– London Capital Group (based on Investing.com)

Pair's outlook
The market was indecisive on Tuesday due to lack of strong movers. The Pound found support at the 200-hour SMA mid-day, giving the confirmation that upside risks should prevail in this trading session. The pair may find resistance at 1.2982/90 by the lower boundary of the broadening wedge apparent on the hourly chart. This is the likely upper limit for today, as the closest resistance on the daily chart formed by the weekly R1 at 1.3037 may be too far to reach. Strong fundamentals for the Dollar may weaken the rate or even reverse it to the downside. In this case, the price should close in the 1.2938/1.2882 territory.

Traders' sentiment
Market sentiment has remained unchanged, as 51% of traders are holding short positions. Meanwhile, 58% of pending orders are to buy the Pound.

 

[KristinaDC]

USD/JPY attempts to climb over 114.00

"With this [expectations of the newly-elected South Korean President to negotiate with North Korea] in the background, as well as the present uncertainty in the U.S., the dollar will trade heavily today below the 114-yen level."
– Daiwa Securities (based on Reuters)

Pair's outlook
The US Dollar outperformed the Japanese Yen for another day yesterday, adding more than 70 pips, but still unable to close above the 114.00 mark. Technical studies keep suggesting the Buck is to post more gains, but the immediate resistance area around 114.15, formed by the weekly and the monthly R2s, could prevent the USD/JPY pair from edging higher today. As a result, risks are skewed to the downside, with the weekly R1 at 113.47 being the nearest possible support. On the other hand, a boost from fundamental and political factors could provide the Greenback with sufficient bullish momentum to climb over the immediate resistance and approach the 115.00 mark.

Traders' sentiment
There are now 65% of traders holding short positions (previously 63%), whereas 54% of all pending orders are to sell the US Dollar.

 

[KristinaDC]

EUR/USD stalls below 1.09

"Traders continue to be wary of the EUR as it approaches the 1.0820 area that was the opening level after the first round of French presidential voting."
– Alexandria Arnold and Dennis Pettit, Bloomberg

Pair's Outlook
On Thursday morning the common European currency traded between the 1.0860 and 1.0880 levels against the US Dollar. From a technical perspective the currency exchange rate was still set to decline down to the support cluster, which surrounds the 1.0830 mark. However, due to recent US Dollar weakness caused by political events in the country the currency pair has remained just below the 1.09 level. Markets are still expecting the Euro to resume its decline, as the European Central bank is set to continue its stimulating monetary policy.

Traders' Sentiment
SWFX traders remain bearish, as 60% of open positions are short. In addition, 65% of trader set up orders are set to sell the Euro.,

 

[KristinaDC]

Gold remains above resistance

"From a pure technical-fundamental aspect, everybody would be eying $1,200 as the next level of support, but I think $1,215 support here is not out of the question."
– Spencer Campbell, Kaloti Precious Metals (based on Reuters)

Pair's Outlook
Due to fundamental events in the US the price of the yellow metal remained above the 1,220 mark on Thursday morning. The future course of the commodity price is unclear, as both from a technical and fundamental perspective the yellow metal's price is being squeezed. The metal keeps finding support in the support cluster below it, which has forced the bullion into breaking short term descending channel patterns that were reviewed in the Trade Pattern Ideas section of Dukascopy Bank. Due to that reason it is possible that a surge is about to occur up to the 1,242 mark in the medium term.

Traders' Sentiment
Trader open positions remain neutral. However, 66% of trader set up orders are set to buy the bullion.

 

[KristinaDC]

GBP/USD attempts to break away from weekly PP

"The improved optimism regarding the macro fundamentals are supportive of a stronger US dollar in the current circumstances."
– London Capital Group (based on Investing.com)

Pair's Outlook
The Cable remained completely flat on Wednesday, although some upside volatility was registered. The Pound has been consolidating against the US Dollar for quite some time now, but with the bullish momentum moderately prevailing. According to technical studies, the Sterling should continue outperforming the US Dollar, with demand at 1.2934, represented by the weekly PP, remains sufficient to keep the pair afloat, and no resistance is preventing the exchange rate from climbing over the 1.30 level. The overall ceiling for now is the area circa 1.3130, where a number of supply levels coincide with the ascending channel's upper boundary.

Traders' Sentiment
Market sentiment remains unchanged, with 51% of all open positions being short for the fifth consecutive time.

 

[KristinaDC]

USD/JPY set for another rally

"With this [expectations of the newly-elected South Korean President to negotiate with North Korea] in the background, as well as the present uncertainty in the U.S., the dollar will trade heavily today below the 114-yen level."
– Daiwa Securities (based on Reuters)

Pair's Outlook
The USD/JPY currency pair surprised with its performance once again, having breached the immediate resistance, thus, stabilizing above 114.00. However, due to the recent almost constant three-week rally, a bearish correction is bound to take place sooner or later, but according to technical indicators—today is no such case. With the weekly and the monthly R2s now providing immediate support, the Buck has the opportunity to even put the 115.00 level to the test, as the upper Bollinger band marks the possible intraday high, as well as the a psychological resistance area, which the given pair failed to pierce back in March.

Traders' Sentiment
There are 66% of traders holding short positions (previously 65%), while 51% of all pending orders are to acquire the US Dollar.

 

[KristinaDC]

Euro finds support against Buck

"Until there is a stronger move down, the chart is now neutral."
– Al Brooks, Brooks Price Action (based on investing.com)

Pair's Outlook
After touching the 1.0840 mark on Thursday the EUR/USD currency exchange rate began a surge, which lasted into the morning hours of Friday's trading. On the daily chart it can be observed that the support for the rebound was provided by the 20-day SMA, which on Friday was already located at the 1.0855 level. Due to that it is highly possible that the currency exchange rate will once more move into the resistance put up by the weekly S1, which is located at the 1.0916 level.

Traders' Sentiment
SWFX traders have slightly decreased their bearish positions, as 59% of open positions are short on Friday, compared to 60% previously. Meanwhile, trader set up sell order proportion has decreased from 65% to 57%.

 

[KristinaDC]

GBP/USD continues to consolidate

"Altogether we remain constructive on GBP and remain long via a basket of USD, EUR and AUD. We remove EUR/GBP upside from our 2017 forecasts and expect GBP/USD to test 1.37 by year-end."
– Nomura (based on FXStreet)

Pair's Outlook
The GBP/USD currency pair underwent another decline on Thursday, driven mostly by weak fundamental data from the UK. However, the decline helped to prolong the consolidation trend, which began three weeks ago. It is yet uncertain whether the 1.28 or the 1.2850 level is the trend's lower boundary, but the 1.30 mark is representing the upper one. As a result, the Cable still has room for another leg down, despite being supported by the weekly S1 and the 20-day SMA demand cluster just under today's opening price. Meanwhile, technical indicators keep insisting that a positive development is due, but that is possible only if the US inflation data disappoints today.

Traders' Sentiment
Traders retain a neutral outlook, with 51% of all open positions still being short. The number of sell orders inched up from 51 to 56%.

 

[KristinaDC]

USD/JPY muted ahead of inflation data

And unfortunately for yen bulls, the weaker yen hasn't led to a pickup in Japanese exports. Until this happens, the yen will likely continue to weaken."
– Marc Chandler, BBH (based on Market Watch)

Pair's Outlook
Despite strong second class US fundamentals yesterday, the Greenback failed to outperform the Yen, due to a drop in yields and stocks. Consequently, the exchange rate fell back under the 114.00 major level, while also putting the second support level, namely the weekly R1, to the test. Downside risks persist today as well, with key inflation data eyed. Disappointment could lead to another significant drop, with the main target being the 113.00 handle, where the 100-day SMA and the monthly R1 rest. On the other hand, technical indicators imply the USD/JPY pair is to edge higher again, in which case the 114.40 mark is still likely to limit the possible gains.

Traders' Sentiment
Traders' sentiment remains bearish at 65%, whereas 55% of all pending orders are to purchase the Buck (previously 51%).

 

[KristinaDC]

Gold approaches 1,230 mark

"Whatever Trump says is important and is affecting the markets and may influence gold prices for the short-term."
– Barnabas Gan, OCBC (based on Reuters)

Pair's Outlook
On Friday morning the yellow metal's price moved higher, as it was attempting to break the resistance, which is put up by the 100-day SMA. The SMA on Friday morning was located at the 1,228.32 level. As the SMA has kept the rate lower for the past three trading session, a break of it would release the piled up bullish momentum, which can be observed also in the SWFX market sentiment. The resulting surge could result in the commodity price reaching the weekly PP at 1,242.06, which is the closest resistance level above the mentioned simple moving average.

Traders' Sentiment
SWFX traders are almost neutral, as 51% of open positions are long. Meanwhile, 62% of trader set up orders are to buy the metal.

 

[KristinaDC]

EUR/USD trades above significant support

"The euro is expected to find further offers around 1.1000 and likely near the Monday high at 1.1023."
– Alexandria Arnold and Dennis Pettit, Bloomberg

Pair's Outlook
During the early hours of Monday's trading session the common European currency scored new heights against the US Dollar, as the currency exchange rate had touched the 1.0950 mark. The currency pair is being supported by the newly calculated weekly PP, which is located at the 1.0932 level. It is most likely that the currency rate will reach for the resistance at 1.0977 by the end of the day. At that level the 50.00% Fibonacci retracement level is located at. However, in the case of a change of the direction the pair might retreat to the 20-day SMA at 1.0873.

Traders' Sentiment
SWFX traders remain bearish, as 61% of open positions are short, and 60% of trader set up orders are to sell the Euro.

 

[KristinaDC]

GBP/USD on route to erasing last week's losses

"Altogether we remain constructive on GBP and remain long via a basket of USD, EUR and AUD. We remove EUR/GBP upside from our 2017 forecasts and expect GBP/USD to test 1.37 by year-end."
– Nomura (based on FXStreet)

Pair's Outlook
Even though the US inflation data disappointed on Friday, the Cable was still unable to close in the green zone, but did manage to negate all intraday losses. Trade remained relatively unchanged, with the consolidation trend also intact, thus, a positive development today is expected. The 1.30 mark is the trend's upper border, which is unlikely to be reached today, as no strong market movers are expected to emerge today. However, the nearest resistance, namely the weekly PP, is not much of an obstacle; therefore, more attention should be paid to the second supply area, formed by the weekly R1 and the upper Bollinger band circa 1.2985.

Traders' Sentiment
Market sentiment remains bullish, but now with bulls slightly outnumbering the bears, as 51% of all open positions are long.

 

[KristinaDC]

USD/JPY sets off with a rally

"And unfortunately for yen bulls, the weaker yen hasn't led to a pickup in Japanese exports. Until this happens, the yen will likely continue to weaken."
– Marc Chandler, BBH (based on Market Watch)

Pair's Outlook
The USD/JPY currency pair appears to have topped out last week, with the 114.40 mark being the reversal point. Poor US fundamentals contributed to the U-turn, causing the Greenback to weaken further against the Yen. However, due to the pair opening with a bearish gap today, the Buck managed to regain some of its bullish momentum, paving its way towards erasing Friday's losses. Technical indicators support this possibility, but the 114.00 major level is still expected to be out of reach. Overall, this recovery is likely to be a minor setback in the US Dollar's bearish trend, as demand, represented by the 200-hour SMA, which caused the reversal, should not succeed again this week.

Traders' Sentiment
Today 63% of traders are bears (previously 65%), while all pending orders are equally divided between the buy and the sell ones.

 

[KristinaDC]

Gold continues higher

"U.S. data on Friday showed a smaller-than-expected 0.4 percent increase in April retail sales from the previous month, while a disappointing report on consumer prices raised concerns about the retail sector and the broader economy."
– Vijaykumar Vedala, Reuters

Pair's Outlook
On Monday morning the yellow metal continued to score gains against the US Dollar, as the bullion passed a significant resistance level. The commodity price surged to trade above the 100-day SMA, which is located at the 1,229.29 mark. Due to that fact the bullion has a large free range for a surge. The closest resistance level was the weekly R1, which is located at the 1,239.37 level. It is highly possible that the resistance will be reached during this week. However, smaller timeframe resistance levels might hold back the metal.

Traders' Sentiment
SWFX market sentiment remains almost neutral, as 52% of open positions are long. However, 64% of trader set up orders are to buy the metal.

 

[KristinaDC]

EUR/USD reaches above 1.10 mark

"The greenback, lower versus most of its G-10 peers, was down for a fourth day, with the Bloomberg dollar index nursing losses of about 0.2 percent after dropping to its lowest since April 26."
– Alexandria Arnold and Dennis Pettit, Bloomberg

Pair's Outlook
The common European currency continued to surge against the US Dollar on Tuesday morning. The currency exchange rate reached above the 1.10 mark and was set to score additional gains. The pair is most likely going to reach the resistance put up by the weekly R1, which is located at the 1.1025 level. Due to the fact that the first weekly resistance is strengthened by three more additional levels of significance, it is highly unlikely that the rate will pass the resistance cluster, which is located from 1.1025 to 1.1057. The rate is more likely to retreat after a few failed attempts.

Traders' Sentiment
SWFX market sentiment remains bearish, as 63% of open positions are short, and 61% of trader set up orders are to sell the Euro.

 

[KristinaDC]

GBP/USD puts consolidation trend at risk

"Due to the level of expectation in the market for a big CPI number, the bigger risk is a disappointing number that could weigh on the Pound. Key support levels to watch include 1.2900 for GBP/USD and 0.8500 for EUR/GBP."
– City Index (based on PoundSterlingLive)

Pair's Outlook
Monday ended with the Sterling once again being unable to post solid gains against the US Dollar, thus, prolonging its consolidation trend for another day. Nevertheless, the Cable has the opportunity to reach the trend's resistance line at 1.30 today and possibly even break it. Although technical indicators are in favour of the positive outcome, it still remains somewhat unlikely, as the Pound is eventually expected to test the wedge's lower boundary near 1.28. Assuming the pair consolidates until next week, a good confirmation of both trend support's would be achieved around 1.2850—where they coincide.

Traders' Sentiment
Market sentiment reached a perfect equilibrium today, while pending orders are close to that as well, with 51% of them set to sell the British currency.

 

[KristinaDC]

USD/JPY continues to weaken

"And unfortunately for yen bulls, the weaker yen hasn't led to a pickup in Japanese exports. Until this happens, the yen will likely continue to weaken."
– Marc Chandler, BBH (based on Market Watch)

Pair's Outlook
A relatively strong recovery yesterday was almost sufficient to erase Friday's losses completely, leaving the USD/JPY pair just few pips away from that day's opening price. The Buck, however, remains under pressure and is likely to slide down due to a stronger Yen. The weekly pivot point is now the immediate support, but the cluster around 112.90 is much more reliable. A failure to find support around this area would open the way towards the 112.00 major level, where the 20-day SMA coincides with the 55-day one, but a plunge that far is out of reach for now.

Traders' Sentiment
Traders remain bearish towards the Greenback, as 65% of all open positions are currently short. At the same time, there are 52% of orders to acquire the US Dollar, up from 50% yesterday.

 

[KristinaDC]

EUR/USD attempts to climb higher

"The greenback, lower versus most of its G-10 peers, was down for a fourth day, with the Bloomberg dollar index nursing losses of about 0.2 percent after dropping to its lowest since April 26."
– Alexandria Arnold and Dennis Pettit, Bloomberg

Pair's Outlook
Tuesday ended with the EUR/USD currency pair breaching the ascending channel's resistance line with ease, opening the door for more bullish potential. However, the Euro does have a rather tough resistance area on its path, represented by the upper Bollinger band, the weekly R2 and the 61.80% Fibo, while the second supply cluster lies around 1.12. On the other hand, we should not rule out the possibility of a bearish correction, which would preserve the channel pattern, as technical indicators are giving mixed signals today.

Traders' Sentiment
There are 62% of traders holding short positions today, compared to 63% on Tuesday. At the same time, all pending orders became equally divided between the buy and the sell ones.