Daily Technical Analysis for Majors by Dukascopy

[KristinaDC]

EUR/USD surges as Draghi speaks

In result of announcement of the EU Minimum Bid Rate as well as the subsequent Mario Draghi press conference, the Euro expectedly broke to the top and appreciated against the Greenback by 1%. Today, two scenarios might happen. First, once the markets will calm down the buck might make an attempt to recover, thus dragging the pair back to the weekly R1 at 1.2013. But most likely the currency rate will continue the surge towards the monthly R1 at 1.2099. If this target will be reached, the will be another two options. Either the pair will make a rebound from the upper trend-line of a medium-term ascending channel, or it will continue to soar in a junior ascending channel towards the northern boundary of a long-term formation.

 

[KristinaDC]

GBP/USD tries to reach 1.3158

An upside momentum provided by the junior ascending channel in conjunction with release of information on the Halifax HPI as well as Mario Draghi speech helped the Pound to break through the upper trend-line of a senior descending channel.

On the one hand, the pair has all chances to continue the surge towards the weekly RR3 at 1.3158. On the other hand, the further direction will very depend on release of data on the UK Manufacturing Production.

If the numbers will be negative, the pair might slip back until a combined support set up by the weekly R2 at 1.3077 and the approaching 55-hour SMA.

 

[KristinaDC]

USD/JPY falls from senior channel

Even though a release of information on the Japanese GDP was worse than analysts anticipated, the last day of the week the currency pair started in a sharp downfall. To certain extent, this breakout from a dominant descending channel was triggered by a combined resistance level set up by the weekly and monthly S1 as well as the 55- and 100-hour SMAs. As a result, the next two likely targets for the pair will be the weekly and monthly S2 at 107.33 and 106.98. But starting from the next week, the buck most probably will try to restore some of the lost positions.

However, there is a need to take into account that development of this currency pair will quite strongly depend on geological situation surrounding North Korea.

 

[KristinaDC]

XAU/USD jumps above 1,352.00

As it was expected, most of the previous trading day the yellow metal spent in an advance against the buck. On the one hand, this movement was triggered by a combined support created by the 55- and 100-hour SMAs. On the other hand, there is also a need to take into account a pressure from the lower trend-line of a rising wedge, which was moving along the above technical indicators. For this reason, today the pair is expected to make a rebound from the upper trend-line of this long-term formation and, starting from next week, resume the fall towards the monthly R1 at 1,348.36. However, there is a need to carefully monitor development of the North Korean crisis, as its further escalation might continue to stir interest in the gold.

 

[KristinaDC]

EUR/USD slips to weekly PP at 1.1999

On Friday, the currency exchange rate acted in accordance with one of the scenarios, which suggested that as soon as markets will calm down the buck is going to try restoring some lost positions. Indeed, after failing to jump above the monthly R1 at 1.2099 the pair switched a direction and ended the week near the combined support level set up by the 55-hour SMA and the updated weekly PP at 1.1999. It seems that the turnaround was partially attributed to clash with the upper boundary of a medium-term rising wedge, which can be clearly seen on a daily timeframe. From this larger perspective the rate is expected to continue to gradually slip to the bottom. However, in the short run these attempts most likely will be neutralized by the 100- and 200-hour SMAs.

 

[KristinaDC]

GBP/USD reaches monthly R1 at 1.3208

Due to positive numbers that were revealed during a release on the UK Manufacturing Production, the Pound caught an upside momentum that helped it to reach the monthly R1 at 1.1320. However, this barrier appeared to be strong enough to prevent the further surge. Given that the southern direction is secured by the 55-hour SMA and the updated weekly PP at 1.3110 as well as the approaching 100- and 200-hour SMAs, an extensive drop is not expected to follow. In contrast, these indicators will motivate the pair to try break to the top. Except for the above monthly R1 the next closest resistance barrier is located only at 1.3310. Yet, these projections can be altered, as the Sterling is expected to be quite heavily affected by a number of data releases this week.

 

[KristinaDC]

USD/JPY encounters combined resistance

As it was expected, the new trading week the Greenback started in a recovery against the Yen. A breakout near the 107.40 mark suggests that the pair is moving in a new junior descending channel. If this assumption is correct, the buck is expected to try to surge towards the monthly PP at 109.76. Yet this target might not be reached from the first attempt, as road to the north is obstructed by a combined resistance level that consists of the weekly PP, the monthly S1 as well as the 55- and 100-hour SMAs. From a daily perspective, this barrier also seems too strong to be crossed. In other words, a new descending channel on a larger timeframe points out that the fourth rebound is expected to follow.

 

[KristinaDC]

XAU/USD falls below 1,340.60

The way the exchange rate started new trading week confirmed that previously it was moving in a medium-term rising wedge. Generally, the pair is expected to gradually move to the bottom, trying to reach the lower trend-line of a senior ascending channel. However, in order to do that the rate will have to cross a combined support level formed by the updated weekly S1 at 1,329.68 and the 200-hour SMA. Even though it sounds like a too strong barrier, the path to the north is also well secured. Namely, it consists of the 55- and 100-hour SMAs as well as the weekly PP at 1,343.70. By the way, the bearish scenario is also confirmed on a daily scale, as last Friday the gold made a rebound from an upper trend-line of a long-term ascending channel.

 

[KristinaDC]

EUR/USD reaches medium support

The common European currency continued its decline against the US Dollar, as it was expected on Monday.

On Tuesday morning the pair had already rebounded against the combined support of the medium pattern and the 200-hour SMA near the 1.1940 mark. Due to that reason a surge was expected.

However, the rebound is most likely going to be hindered by the 100-hour SMA until the pair reaches the weekly PP at 1.1999, which will be supported by the 55-hour SMA. Most likely that combined resistance will force the rate to continue the decline.

 

[KristinaDC]

GBP/USD returns near monthly R1

The GBP/USD currency pair was characterised by a lack of volatility on Monday. The Pound tried to surpass the monthly R1 at 1.3208, but failed to do so for the second consecutive time. Subsequently, it was pressured down to the 55-hoour SMA which managed to support the rate effectively and return it near the aforementioned monthly R1. Technical indicators suggest that this level should not be surpassed. Nevertheless, the UK CPI release scheduled at 0830GMT might introduce some changes to this assumption, especially if data turn our to be solid. By and large, the appreciation that was apparent on Tuesday morning should be followed by a decline in price, setting the 100-hour SMA as a possible bottom target for this session.

 

[KristinaDC]

USD/JPY tests 109.60

In line with expectations, the US Dollar surged against the Yen on Monday, resulting in a 117-pip appreciation within one day. The pair crossed several resistance levels, including the 200-hour SMA at 109.30, and has since showed lack of volatility during this morning. This minor consolidation phase might suggest that bulls have exhausted their upward force and thus give the dominant hand to bears instead. The upside is guarded by the monthly PP and the upper boundary of a channel down circa 109.80—a level that might be a turning point for the rate. Subsequent direction is expected to be to the downside. In case no massive events shake the market, the rate might continue its movement sideways for several hours before dashing towards the 100-hour SMA at 108.60.

 

[KristinaDC]

XAU/USD set for more losses

The bearish scenario came true on Monday for the yellow metal. The bullions price fell below the 1,330 mark in the second half of the day’s trading session.

If one looks at the hourly chart, a marvellous sight appears, as the metal faces no support as low as the 1,312.43 level on Tuesday morning. However, that is not likely going to be the support, which stops the decline of the commodity price.

It is more likely that the bullion will continue in the angle, in which it has been declining for the past few trading sessions, until it reaches the support of the dominant channel up pattern somewhere between 1,315 and 1,320.

 

[KristinaDC]

EUR/USD tries to bypass 1.20 level

In line with expectations, a resistance created by the 55- and 100-hour SMAs prevented the further advance of the Euro against the Greenback. At the moment, this barrier is also strengthened by the weekly PP. For this reason, the pair is expected to fail to break to the top. However, a sharp decline should not happen as well, as the southern side remains reliably protected by the 200-hour SMA, which is moving along the lower support line of a long-term ascending channel. In other words, the rate is expected to stay for some time in this ascending triangle. On the other hand, an effect from release of data on the US PMI at 12:30 GMT might give a necessary impulse to bypass the above resistance a stay for some above the 1.9999 mark.

 

[KristinaDC]

GBP/USD to reach upper edge of dominant pattern

Due to release of satisfying data on the UK CPI, the Pound got an upside momentum that helped it to cross the monthly R1 at 1.3208 and then continue the surge. In the early Wednesday morning the pair even managed to reach the weekly R1. Most probably, until a release of information on the UK Average Hourly Earnings the pair will continue to fluctuate around the 1.3310 level. Usually, the market reaction on this event amounts to 30-40 basis points. This means that if the released data will justify experts’ forecasts, the Sterling might finally reach the upper trend-line of a dominant ascending channel and then make a rebound. In the opposite scenario, the pair is likely to slip back to the 55-hour SMA and then continue the downfall.

 

[KristinaDC]

USD/JPY confidently moves to north

In result of the yesterday’s advance, the currency exchange rate managed to cross practically all barriers on its way. As a result, the only two obstacles that could prevent the further path to the north, except for the upper trend-line of a former descending channel near 110.42, are the weekly R2 at 110.98 and the monthly R1 at 111.26. From this perspective, the Dollar is expected to continue to appreciate against the Yen. An aggregate of technical indicators supports this assumption, sending strong buy signals for the upcoming day. However, there is also a need to take into account that an average market sentiment remains 58% bearish. Moreover, in the middle of the day the above scenario might be altered, depending on the released US PPI data.

 

[KristinaDC]

XAU/USD trades around 1,329.68

Even though the pair managed to cross the weekly S1 at 1,329.68 yesterday, the pressure of the bears was not strong enough to push it to the bottom edge of a dominant ascending channel.

On the other hand, a fully-fledged rebound did not happen as well and is not expected to happen today either. The main reason for such assumption is that the northern side contains too many technical barriers, such as the 200- and 100-hour SMAs as well as the weekly PP at 1,343.70. They could be crossed if the gold had fundamental rationale, but for now it does not. The opposite side, in turn, has an empty area up until the lower support line of the above pattern.

 

[KristinaDC]

EUR/USD breaks long-term channel

Due to release of negative data in the US on the PPI the currency exchange rate made suddenly dropped down to the monthly PP, which is located at the 1.1881 level. In result of this action, the pair broke through the lower trend-line of a three month long senior ascending channel. At the moment, the only barrier that it faces from the south is the bottom edge of another more recently formed ascending channel. In this sense, the buck might drag the pair even lower. On the other hand, the pair is likely is stuck near the above monthly PP for some time, while traders are anticipating a release of data on the US CPI at 12:30 GMT. Accordingly, the positive result will strengthen the downside momentum even more, while the negative will give the Euro a necessary impulse to recover from yesterday’s loss.

 

[KristinaDC]

GBP/USD anticipates BoE decision

As it was expected, a mismatch with experts’ forecasts on the UK Average Hourly Earnings forced the pair to make a premature rebound and retreat towards the closest combined support level formed by the 100-hour SMA and the monthly R1 at 1.3208. However, over the last ten hours the exchange rate did not make any significant moves. The reason behind such low volatility is anticipation of announcement of the Official Bank Rate by the Bank of England. Most probably, this event will lead to quite sharp depreciation of the Pound. In the first hour the downfall might be stopped by a combination of the 200-hour SMA and the weekly PP at 1.3110. However, then the pair is likely to slip even further, tending to reach the weekly S1 and the monthly PP near 1.2990.

 

[KristinaDC]

USD/JPY fails to break above 110.68

In line with expectations, the Dollar continued to advance against the Yen in a junior ascending channel, successfully crossing the upper boundary of a formed dominant formation. However, an effect from release of data on the US PPI was not as strong, as with other currency pairs. Namely, the pair made two attempts to climb above the 110.68 level but failed. Due to pressure from the 55-hour SMA, which is moving along the pattern, the pair is likely to make one more attempt to reach the weekly R2 at 110.98. At the moment, the only factor that could push the pair through this resistance, which is additionally strengthened by the monthly R1 at 111.26, is a release of data on the US CPI and Core Retail Sale. Otherwise, these technical indicators will force the rate to make a rebound.

 

[KristinaDC]

XAU/USD rebounds from bottom edge of ascending channel

A release of update on the US PPI led to 0.97% appreciation of the buck against the yellow metal. Fortunately, this time an effect from the above fundamental event matched with the technical analysis, which also pointed out on the further downfall of the rate. However, after reaching the lower trend-line of a long-term ascending channel the pair made a rebound. From a larger perspective, this turn around means that the gold once again has to start gaining value and try to soar towards the monthly R2, which is located at the 1,374.50 level. From a short-term perspective, the surge is likely to be neutralized by a combination of the 100- and 200-hour SMAs. In addition to that, there is a need to take into account an effect from release of data on the US CPI, which can alter the above scenario.