Daily Technical Analysis for Majors by Dukascopy

[KristinaDC]

Gold remains above 1,250 mark





"Gold could face more pain if tonight's FOMC (Federal Open Market Committee) minutes shows that the Fed is on course for two to three more rate hikes this year."
– Jeffrey Halley, OANDA (based on Reuters)

Pair's Outlook
The yellow metal's price remains above the 1,250 mark, as the strong support cluster just below that level holds its ground. However, fundamental shifts in the market are possible, as US monetary policy makers will affect the strength of the bullion from the US Dollar's side. The FOMC meeting minutes will reveal, how many and what kind of Federal Funds Rate decisions might take place in the future. Although, from a technical perspective the surge of the bullion should continue, as the SMAs should push it higher soon.

Traders' Sentiment
SWFX market sentiment remains almost neutral, as 52% of open positions are short. However, 67% of trader set up orders are to buy the bullion.

 

[KristinaDC]

GBP/USD risks ending consolidation

"There is still scope for further upside in the near term. The long-term downtrend currently stands at approximately 1.35 and it is still possible that we could see that tested before the dollar begins to reassert itself."
– Charles Stanley (based on PoundSterlingLive)

Pair's Outlook
Even though the Cable failed to behave in accordance with expectations yesterday, the consolidation trend still remained intact. Overall, the situation did not change since Wednesday, as the Pound is still required to experience another leg down in order for the trend to continue its existence. The same supports and resistance are in play and technical indicators keep suggesting the GBP/USD pair is to appreciate, meaning that a bullish development is also more than possible, which would, this time, fully break the consolidation trend. However, solid gains beyond 1.3030 are also doubtful due to the absence of a strong market mover.

Traders' Sentiment
There are 52% of traders being short the Sterling against the US Dollar today, while the portion of buy orders inched down from 56 to 52% in the last 24 hours.

 

[KristinaDC]

USD/JPY stuck between 110.50 and 112.00

"The rise in Treasury yields is supporting the dollar. It appears that speculative buying of Treasuries has run its course, with Trump concerns and geopolitical risks no longer fresh news."
– Daiwa Securities (based on Reuters)

Pair's Outlook
The US Dollar weakened against the Yen on Wednesday, but managed to avoid serious losses by closing at 111.50. However, further bullish potential is now under question, as the 55-day SMA and the weekly pivot point are once again acting as an immediate supply area. A drop back under 111.00 is always possible, due to lack of supports around that area, leaving the monthly PP at 110.48 as the only possible turnaround point unless losses exceed 150 pips. Technical indicators are unable to confirm the possibility of either the negative or the positive outcome, thus, we should not rule out the chance of another leg up and the potential retake of the 112.00 mark.

Traders' Sentiment
Traders' sentiment remains bearish, with 57% of all open positions being short. Meanwhile, 52% of all pending orders are to buy the Buck.

 

[KristinaDC]

Gold remains below 1,260 level

"I do not think the market's view for two more rate hikes has changed following the release of the Fed meeting minutes."
– Helen Lau, Argonaut Securities (based on Reuters)

Pair's Outlook
As the FOMC Meeting Minutes did not change the opinion of the market participants in regards to US rate hikes this year, the bullion began to regain previously lost ground. However, somewhere around midnight the situation has slightly changed. During the early hours of Thursday's trading session the commodity price had slightly declined, as it must have encountered a smaller timeframe chart's resistance, which keeps the metal form jumping. However, it is most likely that the surge will resume and the 1,270 mark will be reached.

Traders' Sentiment
SWFX traders remain almost neutral, as 51% of open positions are short. However, 68% of trader set up orders are to buy.

 

[KristinaDC]

EUR/USD rebounds back above 1.12

"It was supposed to be a year of risk that could lead to a break up of the euro. It's turning out to be the best year in a decade for the shared currency."
– Stefania Spezzati, Bloomberg

Pair's Outlook
During the early hours of Friday's trading session the common European currency traded against the US Dollar just above the strong support cluster near the 1.1190 level. It is almost exactly where this week's trading session began. Due to that factor the situation remains almost unchanged. From the downside the rate is supported by the combined support of the 61.80% Fibonacci retracement level and the monthly R2 at the already mentioned level. From the upside the pair faces the resistance of the upper Bollinger band at 1.1310 and the weekly R1 at 1.1306. The only difference, compared with Monday, is the fact that the Bollinger band has moved higher.

Traders' Sentiment
Traders remain bearish on the pair, as 61% of open positions are short. Meanwhile, 53% of trader set up orders are to sell the Euro.

 

[KristinaDC]

GBP/USD to retest trends' supports

"I think the pressure is on here. We could see a significant move lower (in sterling) provided these uncertainties [the upcoming elections in the UK] in the polls persist."
– Stephen Innes, OANDA (based on Reuters)

Pair's Outlook
Yesterday, once again the Cable remained relatively unchanged, experiencing a small decline, which caused the consolidation trend to be preserved for another day. Risks are still skewed to the downside, but with the GBP/USD pair having a strong support at 1.2850, formed by the lower Bollinger band, the consolidation trend's lower boundary and the broadening rising wedge's support line. Losses are unlikely to exceed this area, although volatility lower is quite possible. Meanwhile, technical studies are unable to confirm either scenario, as they retain mixed signals.

Traders' Sentiment
Market sentiment remains relatively neutral, as 52% of all open positions are short and the remaining 48% are short. At the same time, the share of buy orders inched slightly up, namely from 52 to 53%.

 

[KristinaDC]

USD/JPY still anchored to 55-day SMA

"The rise in Treasury yields is supporting the dollar. It appears that speculative buying of Treasuries has run its course, with Trump concerns and geopolitical risks no longer fresh news."
– Daiwa Securities (based on Reuters)

Pair's Outlook
The Greenback successfully outperformed the Japanese Yen on Thursday, causing another setback in the anticipated decline towards 111.00. Treasury yields keep weighing on the Buck, thus, a negative outcome is most likely today, despite technical indicators being unable to confirm this possibility. The weekly PP and the 55-day SMA now form immediate support, but are likely to fail at holding the losses. The main target at the moment is the 111.00 handle, but a drop that low is yet uncertain, as fundamental data could have a bullish effect on the USD/JPY pair today, in which case intraday losses have a solid chance of completely being erased.

Traders' Sentiment
Traders remain bearish towards the US Dollar, with 58% of all open positions being short. Purchase orders take up 52% of the market.

 

[KristinaDC]

Gold fails to surge above 1,260

"China's net gold imports via main conduit Hong Kong dropped 33.5 percent in April from the previous month."
– Vijaykumar Vedala, Reuters

Pair's Outlook
On Friday morning the yellow metal's price remained below the 1,260 mark, as it failed to reach for the levels near the 1,270 level. However, during Thursday's and Friday's trading the commodity price did not need to retreat for support of the cluster near the 1,250 mark. Which means that a bullish momentum persists in the bullion. Moreover, the 55-day SMA seems to be moving away from the mentioned support cluster to provide support higher. These small factors combined allow to keep in force the forecast of the yellow metal reaching the 1,270 mark in the near future.

Traders' Sentiment
SWFX market sentiment remains unchanged, as 51% of open positions are short. However, 71% of pending commands are to buy the bullion.

 

[KristinaDC]

EUR/USD trades below 1.12 mark

"Draghi's four-year inflationary campaign has so far failed to put price growth on a self-sustaining path toward the ECB's goal of just under 2 percent."
– Alessandro Speciale, Bloomberg

Pair's Outlook
On Monday morning the common European currency began the week against the US Dollar below the resistance near the 1.1190 level. Near that level, at 1.1187, is located the monthly R2, and exactly at the 1.1190 mark resides the 61.80% Fibonacci retracement level. The currency exchange rate is expected to decline down to the first weekly support level, which is located at the 1.1141 mark. As it is a lone support level, it is highly possible that it will be passed and the pair will set its course for the weekly S2 at 1.1097.

Traders' Sentiment
SWFX traders remain bearish, as 60% of open positions are short. However, only 51% of trader set up orders are to sell the Euro.

 

[KristinaDC]

GBP/USD: correction anticipated

"Any declines are now classified as corrective and should be well supported ahead of 1.2500 in favour of a higher low and bullish resumption."
– LMAX Exchange (based on PoundSterlingLive)

Pair's Outlook
The Sterling suffered from the election polls, which showed that Theresa May is barely ahead, thus, resulting in a breach of the strong support cluster around 1.2850. Although a technical correction after such a decline is likely, downside risks remain present as well. The 1.28 psychologic level is what keeps keeping the GBP/USD pair afloat at the moment, with the next strong demand area located only around 1.27, formed by the weekly S1, the 55-day SMA and the 23.60% Fibo. Meanwhile, technical indicators are in favour of the positive outcome, in which case the nearest significant resistance will be the weekly pivot point at 1.2977, but such a strong recovery is unlikely.

Traders' Sentiment
Bulls are now slightly outnumbering the bears, as 51% of all open positions are now long and the remaining 49% are short.

 

[KristinaDC]

USD/JPY remains on the back foot

"The markets are used to news of North Korea's missile tests by now, and the dollar/yen is unlikely to move much unless there is some further escalation of the situation."
– Sony Financial Holdings (based on Reuters)

Pair's Outlook
Even though Friday's fundamentals turned out to be better than expected, the Core Durable Goods Orders still weighed on the Buck, ultimately resulting in the USD/JPY pair weakening that day. As a result, the pair prolonged its consolidation, once again putting the 111.00 level to the test. Technical indicators today suggest the Greenback could attempt to pierce the 111.00 mark to the downside again, which would leave the tough support cluster around 110.30 to limit the losses in the future. Trade is likely to be relatively flat this week ahead of Friday's NFP data.

Traders' Sentiment
There are 57% of traders holding short positions today, compared to 58% on Friday. Meanwhile, all pending orders in the 100-pip range are equally divided between the buy and the sell ones.

 

[KristinaDC]

Gold reaches near 1,270 level

"We remain friendly on gold and suspect that we will likely push higher over the course of the coming week."
– Edward Meir, INTL FCStone (based on Reuters)

Pair's Outlook
The yellow metal started the week below the 1,270 mark with a decline. The reason for the decline was the fact that the commodity price already reached and has bounced off the resistance put up by the monthly PP, which is located at the 1,269.77 level. In general, a continuation of the surge in the future is still expected. However, before that the bullion is most likely going to retreat until it finds support in the weekly PP at the 1,261.80 level. Afterwards, the already mentioned monthly level of significance will pose a resistance. Although, due to the month ending soon that resistance will become obsolete soon.

Traders' Sentiment
SWFX traders remain almost neutral, as 51% of open positions are long. Meanwhile, 67% of pending commands are set to buy the metal.

 

[KristinaDC]

EUR/USD consistent with forecast

"The euro slipped with emerging currencies after Mario Draghi's dovish message to the European Parliament."
– Garfield Clinton Reynolds, Bloomberg

Pair's Outlook
As it was expected the common European currency retreated down to the weekly S1 at the 1.1141 level against the US Dollar. However, it can be observed that the pair is already heading even lower, as the weekly S1's attracting force has been already left behind. The next support, which will hinder the decline of the common European currency against the Greenback, will be the weekly S2 at 1.1097. Moreover, it is possible that during the week the pair will decline as low as 1.1050 mark, where nearby a strong support cluster is located at.

Traders' Sentiment
SWFX traders remain bearish, as 61% of open positions are short. However, only 52% of trader set up orders are to sell the Euro.

 

[KristinaDC]

GBP/USD retests wedge's support

"Any declines are now classified as corrective and should be well supported ahead of 1.2500 in favour of a higher low and bullish resumption."
– LMAX Exchange (based on PoundSterlingLive)

Pair's Outlook
The GBP/USD pair behaved in accordance with expectations yesterday, having recovered only half way towards the weekly pivot point. A failure to post solid gains is likely to result in more weakness today, with the monthly PP at 1.2762 being the main target. The Cable has another relatively strong support area around the 1.27 mark, but only another disappointing political event is to have sufficient strength for a leg that far down. On the other hand, the wedge's lower boundary could still have the strength to trigger a rebound, but technical indicators are unable to confirm this possibility, as they turned from bullish to mixed.

Traders' Sentiment
There are 52% of traders being long the Sterling today (previously 51%), while the share of purchase orders slid from 53 to 51%.

 

[KristinaDC]

USD/JPY keeps sliding down

"The markets are used to news of North Korea's missile tests by now, and the dollar/yen is unlikely to move much unless there is some further escalation of the situation."
– Sony Financial Holdings (based on Reuters)

Pair's Outlook
The USD/JPY currency pair opened the week with flat trade, but with the bearish momentum slightly prevailing. No changes are expected in yesterday's outlook, as risks are still skewed to the downside, as technical indicators are suggesting. The 55-day SMA and the weekly PP form a rather tough resistance around 111.40, which is likely to prevent the Greenback from recovering, but a tough demand cluster rests circa 110.35 as well. The given pair is expected to remain within this trading range of 100 pips in anticipation of the Friday's US NFP data.

Traders' Sentiment
Traders' sentiment remains moderately bearish, with 58% of all open positions being short (previously 57%). At the same time, the portion of orders to acquire the US Dollar inched slightly up. The orders now take up 51% of the market.

 

[KristinaDC]

Gold remains below 1,270 mark

"The ongoing political uncertainty in the market is really driving safe-haven buying at the moment."
– Daniel Hynes, ANZ (based on Reuters)

Pair's Outlook
On Tuesday morning the yellow metal remained near previous sessions levels. Although it was expected that the commodity price will decline as low as the weekly PP at the 1,261.80 level, the bullion has continued to pound the resistance of the monthly PP at 1,269.77 for more than the last 24 hours. It is most likely that a fundamental event will set the short term direction of the bullion. It is either going to retreat to the weekly PP or break the monthly resistance and surge. In the case of a surge the metal's price is most likely going to jump to the weekly R1 at 1,275.49, which marks the beginning of a notable resistance cluster.

Traders' Sentiment
SWFX traders remain almost neutral, as 52% of open positions are long. Meanwhile, 66% of pending commands are set to buy the metal.

 

[KristinaDC]

EUR/USD remains below 1.12 mark

"ECB may upgrade its economic assessment when it meets June 8."
– Alexandria Arnold and Dennis Pettit, Bloomberg

Pair's Outlook
After a large increase in the volatility of the EUR/USD currency pair during the second half of Tuesday's trading session the currency exchange rate remained below the 1.12 mark on Wednesday morning. If no fundamental events and information will inflow into the markets during Wednesday's trading the currency exchange rate is most likely going to decline. In such case it faces two lone support levels, which might hinder the fall. First of all it is the weekly S1 at the 1.1141 level, and, secondly, it is the weekly S2 at the 1.1097 level, which is supported by the close by 20-day SMA at 1.1077 mark.

Traders' Sentiment
SWFX traders remain bearish, as 58% of open positions are short. Meanwhile, trader set up pending commands are neutral.

 

[KristinaDC]

GBP/USD in limbo between 1.28 and 1.29

"The narrowing in the polls has clearly dented sterling's performance and continues to weigh on the currency, and is probably likely to do so in the near term."
– Barclays (based on Business Recorder)

Pair's Outlook
The Cable managed to recover from its intraday low yesterday, but failed to breach the immediate resistance, which resulted in trade remaining relatively flat. The pair is likely to keep consolidating today as well, but with risks still skewed to the downside and the 1.28 major level being the main threshold. A decline towards this handle would not mean a complete breach from the broadening rising wedge pattern, as a potential recovery could still take place by the end of the week. Meanwhile, technical indicators retain mixed signals, unable to confirm the possibility of the bearish momentum prevailing today.

Traders' Sentiment
Both traders' sentiment and the portion of purchase orders remain unchanged since Tuesday, taking up 52% and 51% of the market, respectively.

 

[KristinaDC]

USD/JPY gravitates towards 111.00

"The near-term balance of risk appears to favor JPY strength."
– Scotiabank (based on FXStreet)

Pair's Outlook
As was anticipated, the resistance area circa 111.40 caused the US Dollar to weaken against the Japanese Yen on Tuesday, with the weekly S1 at 110.76 limiting the losses. The pair remains contained within a specific trading range, namely between 110.50 and 111.40, leaving little room for another leg down. However, technical indicators suggest that bears are likely to prevail today, although from a broad technical perspective the Buck should strengthen. In either case neither the immediate support nor the resistance are expected to be pierced, leaving the USD/JPY pair to ‘consolidate' for another day ahead of the US NFP data.

Traders' Sentiment
There are 57% of traders holding long positions today (previously 58%), whereas 55% of all pending orders are to buy the Greenback.

 

[KristinaDC]

GBP/USD flirts with 1.29

"The narrowing in the polls has clearly dented sterling's performance and continues to weigh on the currency, and is probably likely to do so in the near term."
– Barclays (based on Business Recorder)

Pair's Outlook
For the third consecutive day yesterday the British currency was able to avoid losses and outperform the US Dollar, continuously retesting the wedge's support line. The Pound, however, is now expected to allow the Greenback to take the upper hand, which arises the risk of the wedge's lower boundary getting pierced today. Technical studies are still unable to confirm this possibility, meaning that the wedge's support could still succeed in limiting the losses; if not, the cluster around 1.2730 is likely to fulfil that task. We should also not rule out the possibility of another leg up, with the 1.2950 handle expected to be the intraday high.

Traders' Sentiment
There are 51% of traders holding long positions (previously 52%), but 57% of all pending orders are to buy the Sterling, up from 51%.