"Gold has risen over 9 percent so far this year despite an 8 percent drop in November, snapping a three-year losing streak."
- Reuters
Pair's Outlook
The bullion traded above the third weekly resistance level, which is located at 1,158.04, on Friday morning. Previously, during Thursday's trading session the yellow metal surged from 1,140.68 to end the session at 1,157.02. However, that was not the end of the jump, as it continued into Friday. The metal's price moved during the week against most technical clues. However, our analysts have found that the last two weeks have been a rebound of the commodity price from a large scale descending channel's lower trend line, which is set to continue.
Traders' Sentiment
Traders remain long on the bullion, as 58% of open positions are bullish. In the meantime, trader set up buy orders have increased from 61% to 70%.
"China took another step to degrade the dollar in defining the value of its currency, in an effort that cuts against its rival's stubbornly strong hold on the global financial system."
- Bloomberg
Pair's Outlook
Following a volatile session on Friday, EUR/USD entered this year with a small green candle on the morning session, testing the upper boundary of the most recent channel down. We will look for the pattern to most likely break, as it has now completed its purpose of leading the pair towards the bottom trend-line of the most senior channel. A decent target for Monday could be 1.0550, with more risk at 1.0580 if a steeper surge is extended. With downside risk limited by 1.0513, it is unlikely that the pair posts losses on today's trading session.
Traders' Sentiment
SWFX traders remain long on the pair, as 55% of open positions are long. Meanwhile, 60% of set up orders are to sell the Euro.
"The GBP/USD exchange rate remains pointed firmly lower as we approach year-end, and the structure of the underlying foreign exchange market suggests we can expect further losses moving forward."
– PoundSterlingLive
Pair's Outlook
The British Pound decided to end the day with a blast, as it successfully reclaimed the 1.23 major level on Friday, having surged 84 pips against the US Dollar. Despite such a rally, technical studies insist the Cable is to suffer a loss today. A corrective decline has a solid chance to occur, however, the weekly PP now forms immediate support relatively close to today's opening price. As a result, the GBP/USD pair could fall approximately 40 pips over the day. On the other hand, in case bulls prevail again the 1.2430 area is likely to be the ceiling, where the weekly R1, the monthly PP, the 20 and the 55-day SMAs form strong resistance.
Traders' Sentiment
Bulls slightly retreated over the weekend, as now 59% of all open positions are long. The share of buy orders inched up from 46 to 58%.
USD/JPY on the edge of breaking the channel pattern
"The dollar looks like it has run its course against the yen for now."
– Mizuho Securities (based on Business Recorder)
Pair's Outlook
The USD/JPY currency pair managed to post some gains last Friday, retaking the 117.00 major and reconfirming the channel's borders. Today the pair opened on top of the same psychological mark, now facing the channel's upper boundary. Consequently, the US Dollar should suffer a small loss in order to provide the channel with an additional confirmation, but the weekly PP, located at 116.97, could provide sufficient support to cause an upside breakout. Furthermore, technical studies also suggest the Greenback is to end the day in the green zone, implying that two weeks was enough for the descending channel pattern to last.
Traders' Sentiment
The bulls and the bear ratio is still equal to one today, while the share of buy orders takes up 51% of the market, unchanged since Friday.
"Gold has risen over 9 percent so far this year despite an 8 percent drop in November, snapping a three-year losing streak."
- Reuters
Pair's Outlook
There was no trading of Gold Monday morning, which led to a lack of motion in the XAU/USD price. As for future movements, the pair has dashed through the 20-day SMA, but losses are likely to be cut at 1,138.98, the lower trend-line. We will look for the channel to remain in force until the upper trend-line of the senior bearish channel is reached, and it could take around at least three weeks to do that. The current downward motion could experience some hitches at 1,148.39, the weekly Pivot Point before the ultimate daily target is addressed.
Traders' Sentiment
Traders remain long on the bullion, as 58% of open positions are bullish. In the meantime, trader set up buy orders have decreased from 70% to 67%.
"The U.S. dollar held quietly firm on Tuesday as the prospect of rising U.S. interest rates this year kept sentiment bullish."
– Wayne Cole (Based on Reuters)
Pair's Outlook
EUR/USD completed the retracement it had been attempting on Monday, posting a green candle now which is somewhat consistent with theory, predicting a bullish outburst after the pattern is broken. The pair could close in the green zone but it is rather expected to maintain the short-term southward motion and target the bottom boundary of the inferior pattern which has been sketched for the sole purpose of leading the rate north. Resistance currently lies at 1.0505 and we would not expect a break above this level today, while the lack of immediate demand areas makes the downside target further away at 1.0386.
Traders' Sentiment
SWFX traders remain long on the pair, as 56% of open positions are long. Meanwhile, 60% of set up orders are to sell the Euro.
"By the late spring, concerns about European politics should be waning just as Britain triggers Article 50 and the wrangling over Brexit begins in earnest. At that point, the full impact of this historic move is likely to hit the markets and the pound is likely to suffer another leg down, in my view."
– Marshall Gittler, FX Primus(based on PoundSterlingLive)
Pair's Outlook
Almost all Friday's gains were erased yesterday, as the Cable slipped back under the 1.23 major level. No significant changes are expected today, as the GBP/USD pair more or less remains in a consolidation period. Despite technical indicators giving mixed signals in the daily timeframe, risks are still skewed to the downside, but with the 1.22 mark being the bottom floor at the moment. Once this psychological support is pierced, the next strong demand area will be only around 1.2120, represented by the weekly S2; the monthly S1 and the Bollinger band.
Traders' Sentiment
There are 64% of traders with a positive outlook towards the Sterling today, up from 59% yesterday. The portion of sell orders is once again in the majority, taking up 58% of the market (previously 42%).
"Short JPY is one of the clearest global reflation trades. We see the currency being the weakest of the G3 in 2017."
– RBS (based on FXStreet)
Pair's Outlook
Another rally on Monday caused the US Dollar to break out from the descending channel pattern, suggesting that more gains are likely to follow. Technical indicators are also in favour of the Buck outperforming the Japanese Yen again, but the weekly R1 now has the potential to limit the possible gains, as it located just under the 118.00 major level, bolstering that psychological resistance. A successful surge beyond 118.00 is to set the USD/JPY pair on a bullish path toward 118.70, where the ten-month high coincides with the weekly R2. However, the relatively recent sharp two-month rally brings doubts to another strong and stable bullish trend.
Traders' Sentiment
Bulls and bears are no longer in equilibrium, as 51% of all open positions are now short. The share of buy orders remains at 51%.
"Gold climbed 0.9 percent to $1,157.54, advancing for the fifth time in the past six trading sessions."
– Adam Haigh and En Han Choong (Based on Bloomberg)
Pair's Outlook
The Bullion opened green on Tuesday and showed a green candle in the making. The pair could now be entering a flat motion towards the junior bottom boundary at 1,142.87 after the 1,148.87 weekly Pivot Point is battled successfully. XAU/USD is currently squeezed in between the weekly and monthly Pivot Points with the 20-day SMA also in the cluster, meaning that the metal could show little volatility over the trading session. With supply and demand being roughly in balance, the Bullion might as well remain intact for now.
Traders' Sentiment
Traders remain long on the bullion, as 57% of open positions are bullish. In the meantime, trader set up buy orders have decreased from 67% to 66%.
"Euro-area manufacturing expanded last month at the fastest rate since April 2011, in a sign that the currency bloc's recovery is intact heading into 2017."
– Paul Gordon (Based on Bloomberg)
Pair's Outlook
EUR/USD took up where it had left off, posting a small green candle during the morning session. The pair has re-entered the previously broken channel down, but it still holds little power as the re-entry is just part of the pair's movement inside the ascending channel that has taken over in order to guide the pair to the northern trend-line of the ultimately senior descending channel. Immediate resistance lies at 1.0443, the upper boundary of the irrelevant channel, while demand lies at 1.0389, the bottom line of the ascending channel.
Traders' Sentiment
SWFX traders remain long on the pair, as 59% of open positions are long. Meanwhile, 64% of set up orders are to sell the Euro.
"The main question for most economists is still the timing of the negative impact of the referendum outcome. It's going to be hard for sterling to make a lot of traction on the back of economic data which is still lagging events."
– RBC Capital Markets (based on Business Recorder)
Pair's Outlook
As was anticipated, the Cable experienced another leg down on Tuesday, with the 1.22 mark limiting the volatility. Technically, the Sterling should now undergo a bullish correction, despite having two resistances on its path: the weekly S1 at 1.2240 and the weekly PP at 1.2314. Another sign of possible negative outcome are the technical indicators, which now suggest another decline is due. Nevertheless, fundamentals could provide a sufficient boost for the Pound today, with a rally seen as far as the 1.2350 mark. However, there are doubts a close above the 1.23 level is possible and the weekly PP getting pierced.
Traders' Sentiment
Market sentiment remains bullish at 64% today. At the same time, the portion of buy orders increased significantly, namely from 42 to 62%.
"The ECB and [Bank of Japan] are only happy to see the dollar strengthen to allow their economies to recover. But it has a negative impact on emerging markets and the Fed will be very careful not to let the dollar strengthen too much. One of the risks for the dollar is the Fed tightening too soon too much."
– BNY Mellon (based on Market Watch)
Pair's Outlook
The USD/JPY pair was rather volatile on Tuesday, but failed to retain its strength by the end of the day, as trade close with the pair adding only 17 pips. Nonetheless, this was the third consecutive rally and the Buck is set for the fourth, assuming the weekly R1, which is the closest resistance, is breached. Technical indicators keep giving bullish signals, bolstering the possibility of the positive outcome today, but should the FOMC Minutes provide a dovish tone—the Greenback could retreat all the way down to 117.00, where the weekly PP coincides with the 20-day SMA.
Traders' Sentiment
Bears gained some numbers over the day, as 53% of all open positions are now short (previously 51%). Meanwhile, 67% of all pending orders are to purchase the US Dollar, compared to 51% on Tuesday.
"Spot gold was up 0.3 percent at $1,162.68 an ounce by 0639 GMT. Prices touched their highest in three weeks on Tuesday at $1,163.52."
– Swati Verma (Based on Reuters)
Pair's Outlook
Gold opened green on Tuesday, eyeing the weekly R1 at 1,165.12 with some more risk at 1,168.25, the upper trend-line of the ascending channel. We will look for the pattern to hold for around one and a half weeks, when it will have served its purpose and led XAU/USD to the upper trend-line of the senior channel down. Support lies at 1,153.74/31and could as well come into play today, in case the pair requires a more complete wave to the bottom boundary at 1,145.23. Signals at the support area will serve as an indicator on whether the downwave is complete and short-term demand will go on to guide the pair north.
Traders' Sentiment
Traders remain long on the bullion, as 58% of open positions are bullish. In the meantime, trader set up buy orders have increased from 66% to 69%.
"A composite Purchasing Managers' Index climbed to 54.4 in December from 53.9 in November, IHS Markit said on Wednesday."
– Carolynn Look (Based on Bloomberg)
Pair's Outlook
EUR/USD topped expectations and is now attempting to conclusively break the upper boundary of the ascending channel pattern on the hourly chart. The pair managed to dash through resistances at 1.0505 and 1.0513 before overstepping the trend-line in a prominent green candle for the morning session. We will look for the rate to erase some of the gains in order to stay below 1.0533, while an alternative scenario would lead to tests of 1.0580, the monthly Pivot Point. Nevertheless, risk will be skewed generally to the upside until mid-February or early March when the upper senior boundary comes into play.
Traders' Sentiment
SWFX traders remain long on the pair, as 55% of open positions are long. Meanwhile, 60% of set up orders are to sell the Euro.
"The current movement is likely the early stages of a consolidation phase and GBP is expected to trade in a broad 1.2220/1.2450 range for now."
– UOB Group (based on FXStreet)
Pair's Outlook
The British Pound managed to outperform the American Dollar on Wednesday, not only climbing over the 1.23 mark, but also piercing the second resistance level. The Cable, however, keeps gravitating towards the 1.23 level for a few weeks now; therefore, another leg down is expected. Consequently, the Sterling is likely to slump back under 1.23, with focus shifting to the second support level once again, namely the weekly S1. Overall, the 1.22 major level is the main target, where the given pair could receive sufficient support for a rebound or breach it and continue moving towards 1.21, where a tough demand area is located. Technical studies are unable to confirm this scenario.
Traders' Sentiment
Today 61% of traders are bulls, compared to 64% yesterday. At the same time, the share of buy orders dropped down from 62 to 47%.
"Some people say the 'Trump rally' has come to an end already. Others say the real rally will begin after he will take office. It's not clear what the market's next theme will be."
– Societe Generale (based on Reuters)
Pair's Outlook
Even though the USD/JPY currency pair weakened on Wednesday, it still remained within its weekly trading range, namely between 117.00 and 117.90. Earlier today the pair fell victim of hard selling, causing the exchange rate to drop under the 116.00 handle. At this point the closest support is unlikely to be of any use, with all attention being on the cluster around the same 116.00 mark, where the weekly S1, the monthly PP and a support trend-line are located. However, technical studies insist the Buck is to edge higher today; given the nature of the fundamental data today, positive readings could cause the pair to recover from its intraday lows, but this scenario is highly unlikely.
Traders' Sentiment
Market sentiment is now equally divided between the bulls and the bears, while 61% of all pending orders are to acquire the US Dollar.
"It's more of a dollar sell-off than a gold move."
– Jeffrey Halley, OANDA (based on Reuters)
Pair's Outlook
The yellow metal surged at the start of Thursday's trading session, as the commodity price almost reached the 1,180 mark. The day's surge was a continuation of the jump started by the end of Wednesday's trading session. The move higher is caused by weakness in the US Dollar, rather than the strength of the yellow metal. As the bullion will continue to surge, it is set to face resistance at the 1,179.94 level, where the weekly R2 is located at. However, for now it might retreat for a short while before continuing the surge.
Traders' Sentiment
SWFX traders remain long on the yellow metal, as 57% of open positions were long on Thursday. In the meantime, trader set up pending commands remained unchanged, as 69% of trader set up orders were to buy gold.
"Fed officials seem a lot less certain about the glide path of future projected rate rises."
– Michael Hewson, CMC Markets (based on Bloomberg)
Pair's Outlook
On Friday morning the common European currency was in a retreat against the US Dollar, as the currency exchange rate encountered the resistance of the upper trend line of a medium term ascending channel pattern. However, the rate seemed to already have found support by 7:00 GMT, as it encountered the monthly PP at 1.0580. That stopped the fall for the time being. Although, it is most likely that the decline will resume shortly. Previously, during Thursday's trading session the currency pair surged 1.12% from 1.0489 to 1.0606.
Traders' Sentiment
SWFX traders remain slightly bullish, as 54% of open positions were long on Friday morning. Meanwhile, 59% of trader set up orders were to sell the Euro.
"We tend to see the pound move more when Brexit issues arise and I suspect it will stay this way for some time. Many are skeptical of current economic strength."
– Standard Bank Group Ltd (based on Bloomberg)
Pair's Outlook
Poor US fundamental data and persistent weakness caused by the FOMC Minutes continued to weigh pressure on the American Dollar, allowing the British Pound to take the upper hand yesterday. As a result, the Cable surged nearly 100 pips, meeting resistance only near the 1.2420 mark. Although slightly weaker, but the same supply area keeps providing strong resistance, which could turn the tide back into the Greenback's favour. Technical indicators support this outlook, but another set of weak fundamentals could still provide the GBP/USD pair with sufficient impetus for another leg up.
Traders' Sentiment
There are 68% of traders with a positive outlook towards the Sterling today, compared to 61% yesterday. Sell orders keep rising, now taking up 58% of the market (previously 53%).
"USD/JPY remains capped by the 16 month resistance line at 118.56 and is downside corrective near term - we will need a close above here to resume its bull move."
– Commerzbank (based on FXStreet)
Pair's Outlook
The USD/JPY currency pair lost almost 200 pips on Tuesday, amid weak US fundamental data and the return of risk-aversion mood. Losses were only limited by the third support cluster, located just above the 115.00 major level. This demand area appears to have caused the Buck to rebound, but technical indicators are unable to confirm that the bullish momentum will last. Downside risks are present, in which case the exchange rate could drop below the 114.00, with the monthly S1 then being the only support to limit the losses. Meanwhile, a positive surprise in the data is unlikely to be sufficient to negate Thursday's dips.
Traders' Sentiment
Today 52% of all open positions are long (previously 50%), whereas the share of buy orders remains unchanged at 61%.
