Daily Technical Analysis for Majors by Dukascopy

[KristinaDC]

XAU/USD ready to test weekly S1 at 1,266.63


In accordance with expectations, for couple of hours the fall of the exchange rate was stopped by the 100-day SMA. However, a release of better than expected information on the US manufacturing PMI led to appreciation of the buck against all major currencies including the gold. From technical perspective, the pair is about to reach to weekly S1 at 1,266.63, which represents the only notable support level that separates the pair from the bottom edge of a dominant ascending channel. Given that informational background remains in favour of the buck and there are scheduled no macroeconomic data releases today, the pair is expected to bypass this barrier and continue to move to the south. However, there is a need to take into account that the average market sentiment became 59% bullish.

 

[KristinaDC]

EUR/USD recovers and breaks descending channel

It appeared that a breakthrough the 100% Fibonacci retracement level at 1.1715 and the weekly S1 at 1.1710 had a short-term effect. Despite the average market sentiment, which is 61% bearish, the pair managed to restore not only lost positions but also cross a combination of 55- and 100-hour SMAs as well as the upper trend-line of a medium-term descending channel. On the one hand, the further climb to the top is likely to be hindered by the slipping 200-hour SMA near 1.1810. On the other hand, the above retracement level is also not expected to let the rate to drop to the bottom. For this reason, a great impact on the further direction of the pair will have all fundamental events that are scheduled for today, including Draghi and Yellen speeches.

 

[KristinaDC]

GBP/USD stays in senior channel

In line with expectations, the currency exchange rate failed to break from the one-month-long descending channel yesterday. Accordingly, it formed a third reaction low and continued to move in the opposite direction. However, it seems that the 55-hour SMA is not going to allow the Pound to gain more value against the Dollar, as it did many other times in the past. On the other hand, if a released data on the UK Services PMI will appear to be better than expected, this barrier is unlikely to withhold pressure from bulls. An additional impulse for surge or, in contrast, for downfall is also expected to be provided by an update on the US employment as well as the Fed Chair Yellen speech. Regardless of outcome, there is a good chance that the pair will manage to stay within the pattern.

 

[KristinaDC]

USD/JPY rebounds from 113.21 level

As it was expected, after a rapid short-term surge the pair stopped at the 113.21 level and then began to move to the bottom, breaking from a dominant ascending channel. At the moment, the rate is approaching a combined support formed by the 200-hour SMA and the weekly PP at 112.42, which is located slightly above the bottom trend-line of another ascending channel that still remains in force. This fact points out on an upcoming rebound.

However, the pair might continue to slip to the bottom if the US employment data will not justify experts’ forecast. An additional impulse is also expected to be provided by the subsequent Janet Yellen’s speech in St. Louis.

 

[KristinaDC]

XAU/USD surges on the eve of Yellen speech

Because of the speech that is expected to be delivered by the Fed Chair Janet Yellen at a banking conference in St. Louis, the gold traders not only managed to pull the pair from the weekly S1 lying at the 1,266.63 level but also to push it from a junior descending channel. At the moment, the only barrier that it faces on its way is the 100-hour SMA, which is located slightly below the 61.8% Fibonacci retracement level. Whether the pair will succeed to break through this resistance as well will heavily depend on release on information on the US employment data and of course the subsequent Yellen’s speech. Nevertheless, none of these events are likely to change to the general picture, according to which the rate is expected to reach the lower support line of a dominant ascending channel.

 

[KristinaDC]

EUR/USD moves near 55-, 100-hour SMAs

In general, the pair continued to move between the 200-day SMA and the 100% Fibonacci retracement level, as expected. Unfortunately, none of the yesterday’s events caused any significant volatility in the markets. It seems that movement of the pair was mainly constrained by the 55- and 100-hour SMAs that helped to form a minor ascending channel, which is lying perpendicularly to larger descending channel. In the first half of the day, the rate is expected to try to break through the upper trend line of the above pattern, which is backed up by the 200-hour SMA. If a rebound from the retracement level meant the beginning of a new medium-term uptrend, then the pair should eventually bypass this resistance. Otherwise, a rebound is going to follow, in accordance with the current downtrend.

 

[KristinaDC]

GBP/USD trades around 55-hour SMA

The British Pound is continuing to trade lose value against the American Dollar in a one-month-long descending channel. Despite a bunch of important macroeconomic data releases, the pair did not make any substantial advances yesterday. One of the reasons for that was the 55-hour SMA, which traders continuously used as a support and resistance.

As a result, the pair ended previous trading session in the centre of the channel. Because of the bullish sentiment, traders are likely to try to push the rate to the upper edge of the pattern. However, the above 55-hour SMA once again might turnaround the pair and force it to slip to the weekly S1, which is located at the 1.3210.

 

[KristinaDC]

USD/JPY surges amid US fundamentals

In line with expectations, the currency rate reached and made a successful rebound from the bottom trend-line of a senior ascending channel. Fortunately for the buck, this technical moment matched with release of information on the US non-manufacturing activity. However, the surge did not last for long, as it was quickly stopped by a combination of the 55- and 100-hour SMAs. Such outcome suggests that today bears are going to try to restore lost positions and push the pair back to the bottom at least until the 200-hour SMA, which is located near the 112.55 level. The fact that the dominant channel already consists of five confirmation points implies that a breakout is likely to happen in the nearest future. This assumption looks even more probable amid the pair’s failure the surge above the 113.20 level.

 

[KristinaDC]

XAU/USD fails to break below 1,273.20 again

A release of better than expected data on the US non-manufacturing activity initially caused a great anxiety in the markets. However, a sharp appreciation of the buck was constrained by the 55-hour and 100-day SMAs near 1,273.20. On the one hand, gold traders most probably are going use the above support, as a trampoline, to try to restore some lost positions and return the rate back to the 1,281.00 mark. On the other hand, a presence of the 61.8% Fibonacci retracement level, the 100- and 200-hour SMAs as well as the upper boundaries of two larger descending channels is likely to neutralize the potential surge. Despite the 60% average bullish sentiment, the pair is expected to continue to move in the southern direction, in accordance with the general downtrend.

 

[KristinaDC]

EUR/USD breaks upwards

In result of a decrease of the American unemployment rate, traders tried to push the pair through the bottom trend-line of a large falling wedge pattern. However, it made a rebound and in the early Monday morning left the formation in the northern direction. The surge was not sharp, as the pair still needs to cross a combination of the upper edge of a junior descending channel and the 200-hour SMA. In addition to that, it stuck near the updated weekly PP at 1.1740 that is backed up by the 100-hour SMA. These obstacles as well as the Friday’s jump by 34 basis points just in hour suggest that the rate is likely to retreat for some time. An aggregate of technical indicators support this scenario. In addition to that, market sentiment remains 57% bearish.

 

[KristinaDC]

GBP/USD tries to cross 55-hour SMA

Despite the release of better that expected American income data, the Greenback failed to exploit this fundamental background and eventually depreciated against the Pound. At the moment, the pair is going to start testing a combined resistance set up by the upper trend-line of a recently formed descending channel and the 55-hour SMA. As majority of traders remain bullish, the rate might briefly sneak to the top, trying to reach the 38.2% Fibonacci retracement level at 1.3145. However, an aggregate of technical indicators points out on the further downfall of the rate via sending strong sell signal. This direction seems evident also from larger perspective, as a couple of weeks ago the pair made a rebound from the upper boundary of a long-term descending channel.

 

[KristinaDC]

USD/JPY down 0.6% amid growing Trump & Kim rhetoric

In line with expectations, the currency rate continued to climb to the top, trying to reach the upper line of an ascending triangle pattern, another escalation of the North Korean crisis led to fall of the rate by 68 basis points just in two hours. Accordingly, in the beginning of this trading session the currency rate found itself not only below the updated weekly PP at 112.81 but also the 55-, 100- and 200-hour SMAs. This combined resistance suggests that the pair will be forced to continue to fall. The fact that the closest southern barrier is located only at the 112.20 mark supports the above assumption. On the other hand, as soon as markets will come down, the Dollar is going to start to gradually recover against the Yen.

 

[KristinaDC]

XAU/USD surges by 1.8%

Due to another round of heated rhetoric between Trump and Kim, the gold appreciated against the buck by 0.93% just in one hour and then continued the surge. As a result, the pair started new trading session above the 200-hour and the 61.8% Fibonacci retracement level, which previously formed strong resistance. On the one hand, the rate could continue the soar and try to reach the 1,290.00 mark, using a barrier-free area in its favour. This assumption is additionally supported by the fact that fears over war on the Korean peninsula haven’t gone anywhere yet. On the other hand, after such sudden and massive loss, the buck traders inevitably are going to try to restore lost positions. There is a need to remember that the pair is still expected to reach the bottom edge of dominant channel up.

 

[KristinaDC]

EUR/USD returns to 1.1780

Although many technical indicators pointed out on recovery of the Dollar, the pair made a breakthrough in the opposite direction. The surge was mainly based on better than expected German Industrial Production data and hawkish comments from the ECB official. As a result, the pair returned to the 1.1780 level, from which it started to rapidly fall last Thursday. From technical perspective, now the rate is located above both moving averages and retracement level, which means that the surge could continue towards the weekly R1 at 1.1810. On the other hand, there is couple of fundamental factors that should be beard in mind, as they might notable affect valuation of the Euro. This list includes not only the EU Finance Ministers meeting in Brussels but also possible Catalonia’s declaration of independence.

 

[KristinaDC]

GBP/USD tries to get back to 1.32

In result of the previous trading session, the Pound managed to break through a combined resistance level formed by the 55-hour SMA and the upper edge of a descending channel that was additionally backed up by the 38.2% Fibonacci retracement level. During the surge, the pair has formed a junior ascending channel that together with the bullish market sentiment is likely to elevate the pair to the 1.3200 or even 1.3250 levels. However, in order to reach these targets the Pound needs a release of better than expected data about the UK manufacturing activity. In larger perspective, there is a need to take into account that the pair is moving in a general downtrend that is continuously fuelled by ineffectual Brexit talks.

 

[KristinaDC]

USD/JPY fails to soar to 112.80

An assumption about further movement of the pair was partially confirmed yesterday. On the one hand, bulls made not less than five attempts to break to the top and restore lost positions. On the other hand, a combination of the 55-, 100- and 200-hour SMAs as well as the weekly PP at 112.81 blocked each one of them. As long as investors continue to fear further escalation of the North Korean crisis, the Yen is likely to continue to gain value against the Dollar. In support of this assumption, the average market sentiment continues to be 61% bearish. From technical perspective, there is a need to take into account that while the northern side is full of many technical indicators, the southern side contains only the weekly S1 that is located at the 112.19 level.

 

[KristinaDC]

XAU/USD soars towards 1,290.00

Because of the robust demand on gold from two largest Asian countries as well as continuous fears related to the North Korean crisis, the exchange rate continued to head to the top towards the 1,290.00 target. During the surge, the pair has even formed a minor rising wedge pattern whose breaking point is located exactly near the above mark. In addition to that, there is a need to take into account that an area near the 1,294.00 level represents a location of the 55-day SMA. Hence, one of those technical barriers is likely to turnaround the pair and gives it an impulse to continue to plunge towards the bottom edge of a senior ascending channel. However, if geopolitical situation continued to be as intense as it is now, investors will continue to seek safe heavens, such as gold.

 

[KristinaDC]

EUR/USD climbs to test 1.1832

The Euro continued to appreciate against the Dollar, as expected. The reason behind the surge was related not only to combined support formed by the 55-, 100- and 200-hour SMAs together with the weekly PP, which the pair used as a trampoline, but also to the fact that Catalonia signed but immediately suspended declaration of independence to bargain with Madrid. Accordingly, in the first half of the day the currency rate is expected to test a resistance located near the 1.1830 mark. Historically, this area proved to a significant barrier for the pair. From this perspective, there is a chance that it would halt the soar and make a short term rebound. In the meantime, there is a need to take into account an effect from the FOMC meeting, which is likely to strengthen the Dollar.

 

[KristinaDC]

GBP/USD fluctuates near 1.32

Due to release of better than expected data on the UK manufacturing production, the pair continued to climb to the top and even managed to bypass the 1.32 mark. However, then the surge was neutralized by the 200-hour SMA, which forced the rate to start moving in the opposite direction. To certain extent, this turnaround was related to anticipation of the Fed Meeting Minutes, which is expected to show a hawkish stance on interest rate hike in December. Before this event, the currency rate is unlikely to make major advances in southern direction, as it is protected by a bunch of technical indicators, such as the weekly PP, the 55- and 100-hour SMAs as well as the 38.2% Fibonacci retracement level. But then traders’ reaction might push the pair to a zone near the 1.3110 mark.

 

[KristinaDC]

USD/JPY loses 0.37% amid missile launch

Another test of another North Korean ballistic missile expectedly led to sharp depreciation of the Dollar against the Yen. During the downfall the pair crossed the weekly S1 at 112.19, which was the only support barrier on its way. However, this active selling had a short term effect, as by the end of the day the buck traders managed to restore lost positions and return the rate back to the 112.50 level. Because of the Fed Meeting Minutes traders with bullish sentiment most probably are going to try to push the pair to the top. However, even in case of hawkish comments it would not be easy, as northern side remains protected by a combination of the 55-, 100- and 200-hour SMAs plus the weekly PP at 112.81. In addition to that, the North Korean problem hasn’t gone anywhere.