Daily Technical Analysis for Majors by Dukascopy

[KristinaDC]

XAU/USD touches 1,226 level


As Janet Yellen began giving her testimony on Wednesday, the yellow metal’s price jumped. During the move the commodity price broke out of the ascending channel pattern. However, as the chairwoman ended the speech, the metal had retreated back to the 1,220 level. Moreover, something unordinary was happening on Thursday morning. Although theoretically the pattern is broken, the upper trend line of the ascending channel was still providing resistance to the commodity. Meanwhile, the 200-hour SMA and the monthly S1 were providing support to the metal. Due to that reason it can be expected that additional gains will be scored by the end of the week.

 

[KristinaDC]

EUR/USD finds support

After the fall of the common European currency against the US Dollar on Thursday morning the pair had recovered some of the suffered losses on Friday morning. The currency pair found support in the described cluster below it. However, it did reach down below the 1.1380 level at one moment, which might have triggered placed orders. Meanwhile, on Friday morning it was expected that the surge will continue, as the EUR/USD pair faced only the minor resistance of the 55-hour SMA at the 1.1425 mark. Although, there is a previously broken trend line located just below the 1.1440 mark. The trend line might show some minor resistance, as it did during the early hours of Thursday’s trading.

 

[KristinaDC]

GBP/USD bound between weekly PP and R1

Following a massive leap upwards on Thursday morning, GBP/USD returned to test the weekly PP at 1.2926. Despite various attempts, the Sterling failed to overcome this level and edge lower. The nearest resistance is formed by the weekly R1 at 1.2986. This level may be tested today, given the continuous support from the 20-hour SMA. The market in the morning session demonstrates lack of volatility. Thus, traders may be cautious prior to fundamentals from the US at 1230GMT. In case these data do not shake the market tremendously, it is likely that the pair remains between the weekly PP and R1 in the 1.2910/1.3000 range. Solid downside risks could likewise push the rate to a support cluster formed by the 55-, 100– and 200-hour SMAs circa 1.2900.

 

[KristinaDC]

USD/JPY trades in wedge

During Thursday’s trading session, the US Dollar was trading between the weekly PP and S1. The American currency succeeded at surpassing the former early in the morning, but was reserved back in the range after encountering the 200-hour SMA near the 113.50 mark. There is still some downside potential that may be realised in in the upcoming hours. The Dollar has formed a minor descending wedge against the Yen that could be breached soon. A breakout to the upside is the most likely scenario that may occur in this session in case the pair fails to move below the 113.00 mark. Nevertheless, an upside surge may be hindered or even stopped at the 200– or 100-hour SMAs, while gains should be capped at the monthly R1 circa 114.00.

 

[KristinaDC]

XAU/USD trades below 1,220 mark

The metal continues to trade in the borders of the previously established channel up pattern. As it can be observed on the hourly chart, the commodity price recently found support in the combination of the lower trend line of the mentioned channel and the 100-hour SMA at the 1,216 mark. Since then both the support levels have moved upwards in tandem, and they might force the commodity price even higher. However, the metal will face the combined resistance of the 55 and 200-hour SMAs below the 1,220 mark and the monthly S1 at the 1,220.50 level. Although, in the recent history the SMAs have not shown enough force to change the direction of the metal.

 

[KristinaDC]

EUR/USD is about to be squeezed in

On Monday morning the common European currency had lost ground against the US Dollar. The pair had retreated below the freshly calculated weekly PP, which is located at the 1.1443 mark. Due to that reason the weekly PP could be considered as a resistance level. However, the currency exchange rate was about to be approached from the downside by the 55 and 100-hour SMAs, which both fluctuated at the 1.1430 mark. It is most likely that the pair will get squeezed in between the mentioned level of significance and pressure will begin to build up. Although, it can be clearly observed that the pressure could cause only a break out to the upside. Meanwhile, it is also possible that the rate does not get squeezed in at all, and a surge would begin as soon as the rate is approached by the SMAs.

 

[KristinaDC]

GBP/USD changes direction

The slight appreciation that guided GBP/USD since last Wednesday changed tremendously mid-Friday when the Pound surged against the US Dollar for three consecutive hours, thus closing the session with a 158-pip gain. This appreciation, however, was not sustainable, as the power game between bears and bulls normalised. On Monday morning, the Sterling demonstrated increasing signs that the upward momentum was over, as technical indicators were starting to retrace from the strongly bullish area. Thus, a rising wedge patter was revealed. It is not yet said that the pair will depreciate with high velocity, as there are no significant data released today that could pressure it either direction. Thus, it is likely that the Sterling remains fluctuating around the 20-hour SMA in the 1.3100/10 area.

 

[KristinaDC]

USD/JPY recovers losses

The Friday’s trading session for the USD/JPY currency pair started rather calmly, as it remained in the 113.50/20 range. However, bears started to pressure the pair even before US CPI and Retail Sales at 1230GMT in anticipation of weak data. These disappointing expectations realised, setting the US Dollar for a 55-pip fall in one minute. The American currency did manage to recover some losses; however, failed to overcome the 112.70 mark. It is expected that bulls may succeed at pushing the rate slightly higher in this session. Taking into account that it has formed a channel down, gains may be capped near the 112.70/80 mark or, if this level is surpassed, then at the 55-hour SMA circa 113.10. In general, the market is likely to be rather calm today, thus resulting in a lack of volatility for the pair.

 

[KristinaDC]

XAU/USD breaks patterns

Fundamental data released and covered on Friday by the Dukascopy research team on the live webinar platform has forced the yellow metal’s price higher. The US Consumer Price Index data sets, which were released as much lower than expected, were the cause of the jump. As a result of the jump the junior and dominant channels were broken. However, it could be observed on Monday morning that the upper trend line of the ascending channel had begun to provide support to the commodity price. Due to these reasons combined it can be expected that the gold price will continue to surge. However, the situation all in all has to be reviewed fully, as the underlying strength of both financial instruments has changed.

 

[KristinaDC]

EUR/USD surges as expected

The forecasted jump of the common European currency against the US Dollar has occurred. Finally, after long expectations, the EUR/USD pair has reached above the 1.15 mark. On Tuesday morning the pair traded above the weekly R1, which is located at the 1.1516 mark. Meanwhile, the pair faced the first monthly resistance at the 1.1542 mark. By looking at the hourly chart, it could be assumed that the surge is set to continue. However, one should look at clues regarding the future on larger timeframe charts. As it has to be noted that the currency exchange rate is approaching long term resistance trend lines, which might stop the surge near the 1.1550 mark. On the other hand the markets might react soon to the changes in the monetary policy both in the EU and the US.

 

[KristinaDC]

GBP/USD changes sentiment on Tuesday

GBP/USD was driven by slight momentum downwards on Monday that led the pair towards the 55-hour SMA circa 1.3040. This level, however, was no reached, as morning bulls reversed its direction north. Afterwards, the Sterling continued to move upwards, but with very limited gains. In case fundamental events do not change the current market sentiment, the pair is likely to edge higher and close with gains. Immediate resistance is set by the upper channel line circa 1.3120, while more significant upside barrier is the monthly R1 at 1.3177. In case the rate falls, the 55-hour SMA should support it from further depreciation. By and large, the Pound is expected to trade somewhere near the upper channel boundary on Wednesday morning.

 

[KristinaDC]

USD/JPY stranded in channel

On Monday, the US Dollar remained in a relatively constant range, even despite the massive leap mid-session. This situation changed this morning when the American currency fell down to the 112.10 mark. This momentum downwards could continue in the upcoming hours and therefore move the rate closer to the weekly S1 at 111.70. The given support, however, is very strong, reinforced by the 55-, 100– and 200-day SMAs apparent on the daily chart. Only substantial bearish sentiment may dash through this area. Thus, it is more likely that a reversal to the upside could occur there. In the meantime, another scenario may set the pair for a reversal near 112.00, thus establishing the upper channel boundary in the 112.20/50 territory as a possible trading range until Wednesday morning.

 

[KristinaDC]

XAU/USD faces resistance line

The upper trend line of the adjusted small scale ascending channel pattern is providing resistance to the commodity price. However, it has to be noted that the trend lines drawn on the yellow metal’s charts have to be taken into account as indicators of where the zones of significance are located at. Meanwhile, it is highly likely that the yellow metal will soon begin a retreat down to the lower trend line of the channel up pattern. The bullion’s price is most likely going to attempt to find support in the 55-hour SMA, which on Tuesday morning was located just below the 1,230 mark. In the meantime, the lower trend line of the ascending channel was supported by the 100-hour SMA near the 1,225 mark.

 

[KristinaDC]

EUR/USD consolidates on Wednesday

As it was expected the common European currency extended its gains against the US Dollar until the middle of Tuesday’s trading session. However, it was also expected that a reversal of the direction of the rate could take place, and that occurred in the second half of the day’s trading. The change in direction happened due to the pair encountering the resistance of a massive scale descending channel pattern in the range from 1.1550 to 1.16. It is most likely that the pair will soon make another attempt at the resistance and begin a medium length period of fluctuations around it. Although, in regards to today’s trading session, the Euro is likely going to retreat down to the combined support cluster of the weekly R1 and the 55-hour SMA below the 1.1520 mark. Afterwards a rebound could occur.

 

[KristinaDC]

GBP/USD falls considerably in response to weak data

Tuesday’s session started with the Pound appreciating substantially against the US Dollar, which resulted in the rate reaching the upper channel boundary. However, weak data from the UK set the Pound for a free fall down to the 1.3020 mark, thus erasing all morning gains. The British currency bounced off the weekly PP at 1.3009, but failed not recover, thus remaining stranded between the 55– and 100-hour SMAs until the point of writing. The market may be relatively calm and therefore remain in this range prior to US data release at 1230GMT after which some changes should occur. Gains could be capped at the upper channel boundary, while losses should be limited by the 200-hour SMA circa 1.2940. In case the given data disappoint, the rate might remain below the 100-hour SMA for the whole session.

 

[KristinaDC]

USD/JPY finds support at weekly S1

On Tuesday, the USD/JPY currency pair continued to trade lower, but lost its momentum in the evening when the pair traded in a relatively narrow range. The US Dollar is gradually approaching the upper channel boundary which is being reinforced by the 55-hour SMA circa 112.30. Thus, it is likely that the pair continues to trade sideways ahead of US fundamentals at 1230GMT. In case of solid data, the Greenback should breach the channel and surge to the upside until the 100-hour SMA, at least. Meanwhile, the nearest support levels are set by the weekly S1 and the monthly PP at 111.70/111.39, accordingly. The former worked affectively at halting the pair yesterday; thus the same scenario may repeat today once again.

 

[KristinaDC]

XAU/USD extends gains

The yellow metal broke the resistance line, which was discovered on Tuesday. Due to that reason it can be assumed that, as the bullion forms and reveals the new medium term trend, various short term levels of significance are likely going to become obsolete in the matter of hours. However, the basic hypothesis remains the same. The commodity price is set to surge in the upcoming weeks. In regards to the next few trading sessions, it could be observed on Wednesday morning that the bullion had bounced off a short term resistance line and began a retreat. Although, the commodity price was about to be supported by the 55-hour SMA, which as approaching the bullion from the downside just above the 1,235 mark.

 

[KristinaDC]

EUR/USD retreats as expected

The common European currency has consolidated its gains against the US Dollar, as the currency exchange rate had retreated down to the 1.1510 mark on Thursday morning. During the decline the pair had begun to trade in limbo around the weekly R1, which is located at the 1.1516 level. The pair was not continuing the retreat due to the fact that additional support was approaching. The 100-hour SMA was located at the 1.1499 level, and it was approaching the pair from the downside. There are two possible outcomes to the situation. However, one of them is more likely. As the pair has bounced off the resistance of a massive scale pattern, it is likely going to decline. In addition to that, below the 100-hour SMA there is an almost 50 base points large range free from any type of notable support levels.

 

[KristinaDC]

GBP/USD fluctuates around weekly PP

Thursday’s trading session the currency pair started in a sluggish horizontal movement, being squeezed between the 55- and 100-hour SMAs from the top and the weekly PP at 1.3008 from the bottom. In anticipation of a release of the UK Retail Sales at 8:30 GMT the Pound fell below the above support level towards the 200-hour SMA. But since the data appeared to be better than analysts expected, the pair made a u-turn and started a steady recovery. Accordingly, the second half of the day the rate is expected to spend in attempts to break through the above resistance level, which will be supplemented also by the 20-hour SMA. This scenario is supported by a number of technical indicators, which point out that the pair is oversold.

 

[KristinaDC]

USD/JPY breaks from falling wedge

In line with expectations, the currency pair bounced off from a lower support line near the 111.596 mark and left a falling wedge in an upward direction, bypassing on the way the 20-, 55- and 100-hour SMAs. Such outcome should establish a new uptrend, which will guide movement of the pair at least in next two days. However, for this theory to be true, the currency exchange rate has to bypass two combined resistance levels. The first is formed by the 200-hour SMA and the weekly PP at 113.098, while the second is set up by the weekly and monthly R1 at 113.940. Most probably, one of them will manage to turn around the currency rate, provided that this will not happen even earlier.