Daily Technical Analysis for Majors by Dukascopy

[KristinaDC]

EUR/USD makes an expected rebound

In line with expectations, yesterday the buck relentlessly tried to break though the combined support level formed by the monthly PP, the 200-hour SMA and the ascending channel’s bottom boundary. As it was suspected, it managed to slightly overstep beyond the barrier. However, the downside momentum was not strong enough to fix the result. Today the pair is expected to make one more unsuccessful attempt to slip to the bottom. The only difference is that this time the southern side will be additionally secured by the weekly PP at 1.1881. Similarly to the previous trading day, it might break to the bottom. But, in any case, the fall is not expected to go below the 1.1840-50 mark, as it represents a location of the dominant ascending channel’s lower trend-line.

 

[KristinaDC]

GPB/USD rebounds from weekly R1 at 1.2942

As it was projected, in the first half of the previous trading day the currency rate had easily plunged to the weekly PP at 1.2858, using barrier-free area on its way. However, by the end of the day the Pound has already managed to restore all lost positions and confirmed an existence of junior descending channel.

As a result, today the exchange rate is expected to keep moving in the southern direction in an attempt to reach the 200-hour SMA near 1.2858. However, there is a need to remember that release of information on the UK Manufacturing PMI as well as the US Average Hourly Earnings and Non-Farm Employment Change might significantly alter the above scenario, depending on the result.

 

[KristinaDC]

USD/JPY stops at 109.92

The way the currency rate moved yesterday completely matched with expectations. Due to absence of any additional stimulus, the buck continued to lose value against the Yen up until the weekly R1 at 109.92. The pair made a few attempts to break to the bottom but failed.

For today, projection remains approximately the same. The pair is not expected to resume a successful plunge, as the southern side remains reliably protected by the 100- and 200-hour SMAs as well as by the weekly and monthly PP. On the other hand, a release of the US employment data today at 12:30 GMT might alter this scenario and, in contrast, help the buck to surge towards the weekly R3 at 111.13.

 

[KristinaDC]

XAU/USD surges to 1,323.00

As soon as the buck stopped to receive feeding from various macroeconomic data releases, the yellow metal started to actively recover. In result of the yesterday’s surge, the pair has entered into a junior descending channel. Accordingly, today it is expected to move downwards, successfully breaking through the weekly R3 at 1,316.51. Nevertheless, the fall is not expected to last for long due to presence of a combined support level set up by the 55- and 100-hour SMAs.

On the other hand, there is a need to take into account an effect from release of another fundamental data later this day. If it fails to justify expectations, the weakening buck might push the pair out of the channel in the northern direction.

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[KristinaDC]

EUR/USD forms symmetrical triangle

Despite that all three American employment indicators that were released on Friday did not justify experts’ forecasts, the Greenback continued to appreciate against the Euro and even managed to break through the bottom trend-line of a medium-term ascending channel. Fortunately for the latter, the downside moment was not strong enough to incite the buck to try to break also through the lower boundary of the dominant ascending channel. For this reason, the pair started new trading week precisely at the monthly PP at 1.1881 that is located in the middle of the junior symmetrical triangle. Even though the northern path is protected by a combination of the weekly PP at 1.1918 and the 100-hour SMA, the southern side still consists of a more rugged support level.

 

[KristinaDC]

GBP/USD moves in a limbo

In result of release of data on the UK Manufacturing PMI, the Pound gained a short upside moment that helped it to leave a short-term descending channel to the top. However, a subsequent publication of information on the US labour market neutralized the surge and forced the pair to move horizontally. As a result, today it is squeezed between two barriers. The upper side protected by a the monthly PP at 1.2991 and the upper boundary of a dominant ascending channel, while the southern side is secured by a combination of the updated weekly PP 1.2934 and the 55- and 100-hour SMAs. Both of them represent too strong obstacles to be easily crossed. So, today the pair is expected to continue to fluctuate between them.

 

[KristinaDC]

USD/JPY slips on fears of Kim Jong-un

Over the last couple of weeks, movement of the USD/JPY currency pair was strongly affected by news coming from the Korean peninsula. The same thing happened today as well. In result of a successful test of a hydrogen bomb, the Yen started to actively recover against the Greenback.

These growing fears drove the pair straight through a combination of the weekly and monthly PP around 109.75 as well as the 100- and 200-hour SMAs. As a result, now the rate has no any obstacles on its way up until the updated weekly S1 at 108.80. Consequently, the bears are expected to continue to dominate the market at least until the pair will encounter the above support.

 

[KristinaDC]

XAU/USD tries to leave channel up

A release of the US employment data last Friday predictably stopped the gold from losing value against the buck. In result of the surge that was also strengthened by growing fears over the North Korean crisis, the pair has practically broke through the upper boundary of a dominant ascending channel. From a fundamental side, today the Dollar is not expected to have any news that could motivate it to start to recover. From a technical side, the further surge is obstructed by the updated weekly R1 at 1,339.42 and then by the monthly R1 at 1,348.36. In the meantime, the southern side has a barrier-free area up until the 55- and 100-hour SMAs that are located slightly above the weekly PP a 1,315.75. An average market sentiment point out on a rebound, as 62% of traders remain bearish on the given rate.

 

[KristinaDC]

EUR/USD moves around 1.1898

Most of the previous trading day the currency pair spent in a horizontal movement, being squeezed between the weekly PP at 1.1918 and the monthly PP at 1.1881. At the same time, it is fluctuating in a symmetrical triangle pattern, which is about to be broken.

The southern side remains protected by the bottom trend-line of a dominant ascending channel. In contrast, the northern direction is secured only by the weekly R1, which is located more than 100 basis points from the current position of the rate. For this reason, an upcoming rebound still remains seems to be a more preferable scenario.

 

[KristinaDC]

GBP/USD waits for UK data

The first half of the previous trading day the currency pair, indeed, spent in a limbo between two combined support and resistance barriers. However, a sharp appreciation of the buck by 37 basis points dragged the pair down right in the middle of a short-term symmetrical triangle.

It seems that this pattern formed in anticipation of a release of information on the UK Services PMI. Even though the plunge towards the 200-hour SMAs seems a more reasonable scenario from a technical perspective, everything will depend on content of the report that will be published by the Markit at 8:30 GMT.

 

[KristinaDC]

USD/JPY slips in a channel down

Yesterday the Greenback made a few attempts to break to the top through a combination of the weekly and monthly PP, but failed. For this reason, the Yen continued to appreciate in a descending channel.

Today, the pair is expected to continue to move towards the weekly S1 at 108.80, as the northern side contains too many barriers to allow the buck to recover. The only difference is that this time it seems that the channel has transformed into a falling wedge. However, this minor detail does not change the general projected direction for the pair.

 

[KristinaDC]

XAU/USD fails to break above 1,339.40

In line with expectations, a resistance set up by the weekly PP at 1,339.42 together with the upper edge of a medium-term ascending channel neutralized the further surge of the bullion.

An aggregate of technical indicators suggests that the rise will continue due to pressure from the upcoming 55- and 100-hour SMAs. While this might be true, the northern path remains obstructed not only by the above weekly PP but also by the monthly R1 at 1,348.36 and the weekly R2 at 1,352.71.

In this sense, the further flat movement at least in the first half of Tuesday seems a more likely scenario.

 

[KristinaDC]

EUR/USD under pressure from moving averages

By the end of the previous trading day the currency pair had expectedly made a breakout from a short-term symmetrical triangle. The only difference from similar cases was that it did not choose a clear direction but, instead, continued to move horizontally.

However, today this flat movement is expected to end, as the rate is experiencing pressure from a combination of the 55-, 100- and 200-hours SMAs, which are located slightly below it. Once the pair will manage to break through the weekly PP at 1.1918, it will have a barrier-free area up until the weekly R1 at 1.2013. The eventual surge is expected to happen despite that 65% of open positions are short.

 

[KristinaDC]

GBP/USD gains 0.8%

Shortly after a release of information on the UK Services PMI the Pound got a strong upside momentum and in the upcoming seven hours advanced by 0.8% against the Greenback. Most probably, the surge was based not only on this fundamental event but also on a combined effect from the 200-hour SMA and the lower support line of a rising wedge. But contrary to patterns theory, the currency pair managed break through the upper edge of an ascending channel that was additionally protected by the weekly R1 at 1.3015. After such extensive surges the exchange rate usually enters into a calm horizontal movement for some time and then the counter currency tries to restore some lost positions. Most likely today the buck will try to do the same, using an effect from the US ISM Non-Manufacturing.

 

[KristinaDC]

USD/JPY leaves falling wedge

As it was expected, the currency rate continued to plunge in a falling wedge pattern, trying to reach the weekly S1 at 108.80. Due to existence of this pattern, a collective pressure from the 55-, 100- and 200-hour SMAs from the top and geopolitical tensions, the pair managed to reach this target.

However, there is a need to remember that the exchange rate is simultaneously moving in a dominant descending channel. But given that the road to its bottom edge is secured by the monthly S1 at 108.48, it seems that the pair will make a premature rebound and resume the surge at least until the approaching 55-hour SMA.

 

[KristinaDC]

XAU/USD finally breaks weekly R1

The way the yellow metal moved yesterday gives us an important clue for the further analysis. First, the buck failed to drag the pair down through the 55-hour SMA. Second, the gold managed to recover and break through the weekly R1 at 1,339.42. These facts suggest that the today the exchange rate most likely will fail once again to sneak to the bottom. And in the meantime, it has a good chance to try to reach the monthly R1 at 1,348.36, using the abovementioned support. However, both these assumptions hold true until a release of the US ISM Non-Manufacturing PMI at 14:00 GMT. An effect from this data release might either help the bullion to jump even higher, or will strengthen the buck and push the pair closer to the 100-hour SMA.

 

[KristinaDC]

EUR/USD prepares for EU Min Bid Rate


As it was expected, a pressure from a combination of the 55-, 100- and 200-hour SMAs neutralized any further attempts of the currency pair to slip to the bottom. The exchange rate even managed to from a junior ascending channel and bypass the weekly PP at 1.1918, fluctuating within it. Today will be the next day for the Euro due to announcement of the EU Minimum Bid Rate and the subsequent ECB press conference. Usually, this event leads to very strong traders’ reaction on it. In this context, the pair is expected to make a substantial advance today. Given a reaction to Draghi speech at the Jackson Hole Symposium two weeks ago, the Euro should appreciate today as well. The same direction is also seen from hourly and daily chart perspectives.

 

[KristinaDC]

GBP/USD fails to break through weekly R2

Contrary to expectations, the Pound did move horizontally for long but instead tried to break through the weekly R1 at 1.3077. A reaction from release of information on the US ISM Non-Manufacturing PMI was barely enough to neutralize this attempt. In result, today the pair remains squeezed between the weekly R2 from the top and the weekly R1 from the bottom. From a technical perspective, the southern direction contains other various barriers, such as the approaching 55- and 100-hour SMAs. In this sense, the further surge is a more likely scenario. On the other hand, slightly above the 1.3070 level the pair is likely to encounter the upper line of a dominant descending channel, which might turn around the pair and in this way finally confirm its existence.

 

[KristinaDC]

USD/JPY rebounds from monthly S1 at 108.48

In accordance with expectations, most of the previous trading day the currency rate spent in an upward movement, using the weekly and monthly S1, as trampolines. Despite such rebound, the further road to the north is still obstructed by the 100- and 200-hour SMAs and then by the weekly and monthly PP. For this reason, today the pair is expected to resume the fall and once again to try to break through the above weekly S1 at 108.80. In the meantime, there is a need to take into account a certain effect that might appear after publication of data on the Japan’s Final GDP at 23:50 GMT. Finally, there is also a need to remember that the rate is simultaneously moving in a senior descending channel and still hasn’t formed a new reaction low.

 

[KristinaDC]

XAU/USD moves along 100-hour SMA

Instead of trying to reach the monthly R1 at 1,348.36, using the 55-hour SMA as a springboard, the exchange rate stuck at the weekly R1 at 1,339.42 and stayed there until a release of data on the US ISM Non-Manufacturing PMI. The American figures appeared to be positive and dragged the pair down by 0.5%. Fortunately for the gold, the 100-hour SMA managed to neutralize the further fall. For this reason, the yellow metal has a good basis to try to get back at least to the above weekly R1.

On the other hand, there is a need to take into account that below the 100-hour SMA there is an empty zone up until the junior ascending channel’s bottom trend-line and the 200-hour SMA.