Daily Technical Analysis for Majors by Dukascopy

[Anastasia DC]

Gold treads higher

"The move in the market is somewhat due to the ongoing difference between the ETF holders and money managers."
- ThinkMarkets U.K. Ltd (based on Bloomberg)

Pair's Outlook
The yellow metal is free from fluctuations above the 1,250 level, above which it had bounced up and down for the past week. On Monday morning, the bullion began what seemed to be another slight surge, and it turned out to be just that with one minor exception. The commodity price moved above the newly formed pivot point at 1,253.84, which now is providing support to the metal. On Tuesday morning gold was already pounding on the next resistance level represented by the weekly R1 at 1,261.62. However, it is possible that the metal will bounce off the resistance.

Traders' Sentiment
Traders remain bullish on the metal, as 57% of open positions were long on Tuesday. In the meantime, 62% of pending commands are set up to buy the bullion.

 

[Anastasia DC]

EUR/USD once more below 1.10 on Wednesday morning

"The post Brexit lows near 1.0900 along with the December 2015 weekly reversal settlement and year opening price (slightly below 1.0900) remain in focus."
- Jamie Saettele, CMT (based on Daily FX)

Pair's Outlook
The common European currency had remained rather unchanged against the US Dollar on Wednesday morning. However, after previously falling during Tuesday's trading session the currency exchange rate was below the significant 1.10 mark, as the rate failed to break through the resistance put up by the second monthly support level at 1.1026 during Tuesday's trading. At the moment, the outlook seems like the rate is set to fall to at least the 1.0929 level, where the closes support is located at.

Traders' Sentiment
SWFX traders remain slightly bullish on the pair, as 54% of open positions are long. In the meantime, pending commands remain bearish, as 57% of set up orders are to sell.

 

[Anastasia DC]

GBP/USD sets eye on 1.24

"Most market participants are looking at the Fed for a potential hike in December and as the odds of that increase or decrease, there's some correlation with how the dollar's moving."
- TJM Brokerage (based on Reuters)

Pair's Outlook
The British currency received a boost from a good CPI reading yesterday, successfully climbing over the 1.23 mark. As a result, the Sterling could post more gains against the US Dollar, with the next target being the 1.24 level. However, the 1.24 mark is bolstered by the weekly R1, which could prevent the Cable from edging above 1.2390. Meanwhile, technical indicators are giving mixed signals in all timeframes, creating a possibility for a corrective decline to occur. In this case the immediate support area will doubtfully limit the losses, with the pair sliding back to 1.22.

Traders' Sentiment
Today 63% of traders have a positive outlook towards the Pound, compared to 66% on Tuesday. There has been a solid increase in the share of purchase orders, namely from 39 to 47%.

 

[Anastasia DC]

USD/JPY remains on the back foot

"You've had a pretty good run in the dollar in the last few weeks so I think this is more profit-taking than a real economic story. But generally speaking it's very hard for the dollar to maintain a bull run at the moment, because a stronger dollar acts as a tightening force on the US economy."
- Dominic Bunning, HSBC (based on Business Recorder)

Pair's Outlook
Relatively weak US inflation data yesterday caused the USD/JPY pair to negate all intraday gains and close trade with only a two-pip loss. The Greenback appears to be gravitating towards the 114.00 major level, thus, a positive outcome today would not be a surprise. Moreover, technical indicators keep suggesting that a bullish development is the most probable outcome. In case bulls do prevail, gains are unlikely to exceed the 114.20, where a tough psychological resistance is located. On the other hand, there is a decent chance of a sell-off taking place, with the exchange rate seen falling as low as 103.40.

Traders' Sentiment
Bears keep losing numbers, as 61% of all open positions are long today (previously 62%). The portion of buy orders barely changed as well, having risen from 53 to 54% over the last 24 hours.

 

[Anastasia DC]

Gold struggles with resistance at 1,261.62

"Gold is likely to recover to above $1,300 an ounce next year as a pickup in physical demand counters more potential U.S. rate increases, a Reuters poll at an industry event showed."
– based on Reuters

Pair's Outlook
The yellow metal battled resistance on Wednesday morning, as it faced the first weekly resistance level at 1,261.62. Previously, the bullion surged from the weekly PP at 1,253.84 to the 200-day SMA at 1,265.36. However, afterwards the commodity price moved lower to end the day's trading session just below the before mentioned first weekly resistance level. Although, on early Wednesday morning, the metal attempted to break through the SMA once more, it failed in breaking past it. Nevertheless, it is most likely that gold will surge in the medium term, as the SMA moved northwards.

Traders' Sentiment
Traders remain bullish on the metal, as 56% of open positions are long. In the meantime, 63% of pending commands are set up to buy the bullion.

 

[Anastasia DC]

EUR/USD slightly lower on Thursday

"We're at $1.05, which in the scheme of such a narrow range feels aggressive."
- Alan Ruskin, global co-head of foreign-exchange research in New York at Deutsche Bank (based on Bloomberg)

Pair's Outlook
The common European currency traded slightly lower against the Greenback on Thursday morning. The move lower was just a continuation of an already three day old downward aimed trend, as the pair continued its move lower to the next support level at 1.0929. Moreover, from a fundamental perspective the noise regarding the Brexit negotiations has been messing up the air and mood in the markets, which causes the Euro to continue its decline. It is most likely that the rate is set to reach the before mentioned support level very soon.

Traders' Sentiment
Traders remain bullish with 56% of total open positions as long. In the meantime, 58% of set up orders are to sell the Euro.

 

[Anastasia DC]

GBP/USD in limbo around 1.23

"A successful attempt above the 1.2295/1.2325 resistance area, should pave the way towards 1.2440, a half-way recovery following the decline from the September 29th high to October 7th flash-crash."
- London Capital Group (based on PoundSterlingLive)

Pair's Outlook
The Cable remained relatively unchanged on Wednesday, unable to make its way above the 1.23 level, but with the immediate support cluster also limiting the losses. Technical studies retain mixed signals today, suggesting that the GBP/USD pair is in for another day of flat trade. However, a lot more volatility is expected today, compared to what was seen on Wednesday. Consequently, downside risks are higher, as the monthly S3 failed to keep the Sterling elevated slightly more than a week ago. The 1.22 level is seen to be the bottom floor in case of another leg down.

Traders' Sentiment
Bullish traders' sentiment returned to its Monday's level of 64% (up from 63% yesterday). The majority of all pending orders are still to sell the Pound, namely 57% of them.

 

[Anastasia DC]

USD/JPY keeps gravitating towards 104.00

"The U.S. dollar is in a consolidation period after a big rally on rates expectations over the past month. The next driver of the dollar would be the jobs data and elections in November, until then we might see more of a sideways trade."
- BBH (based on 4-traders)

Pair's Outlook
A spark of risk-aversion caused the USD/JPY pair edge lower on Wednesday, thus, fully breaking the three-week up-trend. However, the 100-day SMA and the weekly S1 just above the 103.00 major level appear to be forming a strong demand area, which is likely to prevent the Greenback from sustaining more losses. There is still room for a decline of approximately 30 pips, but the daily outlook remains optimistic. Technical indicators are also in favour of a positive outcome, as they retain bullish signals today. In case of a bullish development the Buck has the potential to reclaim the 104.00 level, unless the weekly pivot point at 103.88 limits the gains for the third consecutive day.

Traders' Sentiment
Market sentiment remains bullish at 61%, whereas the share of buy orders increased from 54 to 62%.

 

[Anastasia DC]

Gold continues to rise

"Gold is likely to recover to above $1,300 an ounce next year as a pickup in physical demand counters more potential U.S. rate increases, a Reuters poll at an industry event showed."
– based on Reuters

Pair's Outlook
The yellow metal was in the process of breaking through one more resistance cluster on Thursday morning. Previously, the metal was hindered by the 200-day SMA, which gave up, as it moved higher. On Thursday the simple moving average was providing support to the bullion in its surge. However, the metal faced a resistance cluster made up from the weekly R2 1,272.71 and monthly S2 at 1,273.23. Moreover, the 20-day SMA is located at 1,277.12, and the weekly R3 is providing resistance at 1,280.49. Due to that, gold is set up to retreat.

Traders' Sentiment
SWFX traders remain bullish with 58% of total open positions being long. In the meantime 58% of set up orders are to buy the metal.

 

[Anastasia DC]

EUR/USD below Brexit low

"The euro fell to its lowest level since March after European Central Bank President Mario Draghi signaled Thursday quantitative easing won't come to an "abrupt" end."
– based on Bloomberg

Pair's Outlook
The common European currency fell below the Brexit low level of 1.0912 against the US Dollar on Friday morning. Previously, the currency exchange rate held on to the support provided by the third monthly support level at 1.0929, where it ended Thursday's trading session. However, as Friday's trading began slightly lower than the previously mentioned level of significance, it began to provide resistance, which pressured the pair to move lower. Since the rate now faces minor support levels, it is most likely that the fall will continue.

Traders' Sentiment
SWFX traders continue to increase their bullish sentiment, as 59% of open positions are long on Friday. In the meantime, 63% of pending commands are set up to sell the Euro.

 

[Anastasia DC]

GBP/USD in tight range between 1.22 and 1.23

"The pound has been trading like an emerging market currency, with a higher and steeper nominal yield curve correlating to a weaker currency. We think now is time to position for medium-term sterling rebound."
- BNP Paribas (based on Reuters)

Pair's Outlook
The British currency ended trade on Thursday with a 33-pip loss against the US Dollar, managing to retain its position above the monthly S3. With technical indicators remaining mixed, the GBP/USD currency pair risks edging lower. The weekly PP and the monthly S3, however, keep providing immediate support, which could still trigger a recovery towards the 1.23 mark. On the other hand, after Tuesday's relatively strong rally the Sterling has been sliding down; moreover no potential game changer is present today, thus, the base case scenario is a bearish development. Losses are unlikely to exceed the 1.22 major level.

Traders' Sentiment
There are 67% of traders with a positive outlook towards the Pound today (previously 64%). Meanwhile, the majority of all pending orders are to sell the Sterling, namely 58% of them.

 

[Anastasia DC]

USD/JPY to prolong the consolidation trend

"The U.S. dollar is in a consolidation period after a big rally on rates expectations over the past month. The next driver of the dollar would be the jobs data and elections in November, until then we might see more of a sideways trade."
- BBH (based on 4-traders)

Pair's Outlook
Even though the USD/JPY pair was able to climb over the weekly PP, the 104.00 level was still not overcome. The pair struggled to edge above the 104.00 through all of the week and, despite bullish technical indicators, Friday is unlikely to be different. Consequently, the Greenback is expected to weaken against the Japanese Yen again, completely ignoring the immediate support area. The 103.35 level is seen as the bottom floor, although no impetus that can push the exchange rate so low is present today. On the other hand, there is still room for a small rally towards around 104.20, as the pair has been consolidating between 103.33 and 104.22 for two weeks in a row now.

Traders' Sentiment
Today 60% of traders are long the Buck, compared to 61% yesterday. The portion of buy orders lost 2% points, having fallen to 60%.

 

[Anastasia DC]

Gold fails to break resistance and retreats

"Gold has been in a state of indecision since July. Each rally has failed at the trendline and each high has been lower than the prior high."
– based on DailyFX

Pair's Outlook
The bullion retreated back to near 1,260 levels on Friday morning, as the metal failed to break through the resistance cluster, which it faced on Thursday. Although, the outlook looked bright for the yellow metal on Thursday morning, the metal failed to break through the weekly R2 and monthly S2 near 1,273. Afterwards, even the 200-day SMA failed to support the bullion, which fell and continued the fall on Friday morning to reach the support provided by the weekly R1 at 1,261.62. However, it is still possible at large that the metal will continue to fall during the rest of the day.

Traders' Sentiment
Traders remain bullish, as 57% of open positions are long. In the meantime, trader set up orders are 55% to buy the metal.

 

[Anastasia DC]

EUR/USD approaches seven month low

"The euro is coming under pressure from monetary policy divergence as the ECB looks set to prolong its accommodative stance, while the Fed is probably paving the way for a December rate hike."
- Jun Kato, Shinkin Asset Management (based on Bloomberg)

Pair's Outlook
The common European currency began the week by treading even lower against the US Dollar, as the currency exchange rate approached the seven month low level of 1.0822, which is represented by the March low level. It is most likely that the rate will fall to the combined support level of the March low and the first weekly support level of 1.0814 and mark a full week of losses. Although, the newly calculated weekly aggregate technical indicators forecast no change in the pair by the end of the week.

Traders' Sentiment
SWFX traders have not changed their sentiment, as open positions and pending commands remain unchanged, respectively, 59% long and 63% to sell.

 

[Anastasia DC]

GBP/USD to slip for the fourth time

"The pound has been trading like an emerging market currency, with a higher and steeper nominal yield curve correlating to a weaker currency. We think now is time to position for medium-term sterling rebound."
- BNP Paribas (based on Reuters)

Pair's Outlook
There were no surprises on Friday, as the GBP/USD currency pair experienced the anticipated decline, also managing to remain above the 1.22 major level. The outlook remains unchanged, with the Cable expected to keep sliding down today. However, the 1.22 mark now risks getting broken, despite technical indicators retaining mixed signals in all timeframes. Meanwhile, a tough resistance area is weighing on the pair just above the opening price, whereas the weekly S1 at 1.2138 acts as the nearest support; however, the exchange rate is unlikely to reach the given support level today.

Traders' Sentiment
Today 64% of all open positions are long, compared to 67% on Friday. At the same time, the portion of sell orders added two percentage points over the weekend, having risen to 60%.

 

[Anastasia DC]

USD/JPY consolidates between 103.30 and 104.20

"We'll probably see narrow range trading today, with an options barrier at 104 yen."
- Global-info Co. (based on Reuters)

Pair's Outlook
Due to lack of market movers, the US Dollar remained relatively unchanged against the Japanese Yen on Friday. The pair remains subject to weakness, as it keeps gravitating towards the monthly R1 at 103.74, in spite of technical indicators suggesting a rally is possible. The 103.33 level still represents the bottom floor, also bolstered by the weekly S1, the 20 and the 100-day SMAs. Meanwhile, the 104.22 mark represents the upper border of the likely trading range, but the base case scenario is a decline towards around 103.50. Overall, the USD/JPY pair is expected to remain within the borders of its current consolidation trend until October 27.

Traders' Sentiment
Bulls keep losing numbers, as 59% of traders are long the Buck today (previously 60%). The share of buy orders slid from 60 to 57%.

 

[Anastasia DC]

Gold remains unchanged at 1,265

"As long as we can hold above $1,250, then gold should be fine and this drop to the 200 day average will have been our first and best chance to buy the dip."
– Warren Bevan, Wizzen Trading (based on investing.com)

Pair's Outlook
The yellow metal remained unchanged at 1,265 on Monday morning. Previously, on Friday, the bullion saw some volatility and was more volatile to the upside. However, the metal's price almost did not change during the previous session, as both support and resistance are strong and keep the commodity squeezed in. On Monday, the 200-day SMA, which provided significant resistance on Friday, has moved higher and provides more room for the bullion. Although, daily aggregate technical indicators forecast that the metal's price will remain unchanged by the end of the day and even the week.

Traders' Sentiment
Traders have not changed their opinion, as open positions and pending commands remain unchanged, respectively, 57% long and 55% to buy.

 

[Anastasia DC]

EUR/USD remains unchanged for second session

"It seems only a matter of time before the ECB makes a symbolic first stage turn when it announces Taper. At some point, confidence in monetary will falter; and the value gap to be closed is enormous."
– John Kicklighter, Chief Currency Strategist (based on Daily FX)

Pair's Outlook
The common European currency remained unchanged against the US Dollar on Tuesday morning, compared to the level of opening on Monday morning. Previously, on Friday the rate fell below the Brexit low level of 1.0912, and it is posed to fall even more, as the currency exchange rate has the next support almost 60 pips below it. At 1.0822 the March low level is located at, and it is strengthened by the weekly S1 at 1.0814. Although, technical indicators suggest that the pair will remain unchanged by the end of the day.

Traders' Sentiment
SWFX traders have not changed their stance, as 59% of open positions remain long. In the meantime, 60% of pending commands are set up to sell the Euro.

 

[Anastasia DC]

GBP/USD trades in murky waters

"Positioning in sterling remains very short and that could discourage further aggressive selling especially if UK data remains fairly resilient."
- Credit Agricole (based on Business Recorder)

Pair's Outlook
Even though the Cable currency managed to recover from its intraday losses yesterday, the immediate resistance area still remained intact. Nevertheless, the main outlook is unchanged, with the British currency expected to continue edging lower. The 1.22 psychological level could provide some support, but the bearish momentum is likely to keep prevailing until the 1.2150 level is reached, while the weekly S1 is the target support, located at 1.2138. On the other hand, technical indicators retain mixed signals in all timeframes, and due to lack of solid market movers there is a chance the GBP/USD pair will remain relatively flat for another day.

Traders' Sentiment
Today 65% of traders are long the Sterling (previously 64%), whereas 59% of all pending orders are to sell the Pound (down from 60%).

 

[Anastasia DC]

USD/JPY on the edge of breaking out of its trading range

"We'll probably see narrow range trading today, with an options barrier at 104 yen."
- Global-info Co. (based on Reuters)

Pair's Outlook
On Monday the USD/JPY pair reached the upper border of its consolidation trend, meaning that there was a 30-pip rally. Technically, the exchange rate is expected to make a U-turn now and begin moving towards the lower boundary around 103.30. However, according to technical indicators a bullish development is possible, where the weekly R1 at 104.43 is seen as the key resistance. In case bears do prevail, the immediate demand area will be the cluster around 103.75, formed by the weekly PP and the monthly R1, while the consolidation trend's lower border is being bolstered by the weekly S1, the 20 and the 100-day SMAs.

Traders' Sentiment
Bears retreated again on Tuesday, as only 57% of all open positions are long today, compared to 59% yesterday.