USD/JPY launches an attack on 121

Technical Analysis

EUR/USD hits new 2014 low

“My sense is once we get into the first half of 2015 we’re still going to get pretty good growth but not as strong as we just saw it.”

- Tufts University (based on Bloomberg)

• Pair’s Outlook

  Yesterday, the EUR/USD currency pair dropped considerably and managed to set a new yearly minimum in the very end of December. The new 2014 low is located between the monthly S3 and S2 at 1.2163. In the short-term we may observe a slight rebound of the Euro up to 1.2230, while later the pair is still likely to lose more value. However, the next demand area around 1.21 (monthly S3; weekly S1) will try to push the pair to the upside.

• Traders’ Sentiment

  Long opened positions to acquire the Euro against the Greenback went further to the upside, as they reached 55% during last 24 hours. Additionally, long pending orders in 100-pip range from the spot rose to 45%, the highest level in five trading days.

GBP/USD probes tough support at 1.55

“The pound will probably move in a narrow range as people refrain from taking new positions before the new year.”

- Commerzbank (based on Bloomberg)

• Pair’s Outlook

  Having taken the support at 1.56 out of the way, GBP/USD is currently putting a lot of pressure on 1.55, which in turn does not appear to be an easy target. The demand the currency pair is facing right now is implied by the weekly and monthly S1 levels, meaning there is a substantial risk of a bullish correction extending to a major trend-line at 1.565 before the Cable dives to 1.53 and thus continues its journey towards the 2013 low at 1.48.

• Traders’ Sentiment

  After a significant increase the share of bullish traders stabilised around 59% (58% yesterday). As for the pending orders placed 100 pips from the spot price, the percentage of the sell ones keeps growing—it has already reached 60%.

USD/JPY launches an attack on 121

“Looking into next year a more significant rout in emerging markets could lead to more defensive action from central banks such as the SNB and the BoJ.”

- Rabobank (based on Reuters)

• Pair’s Outlook

  As it turned out, the supply at 120 did not manage to stop the advancement of the US Dollar. Accordingly, it is now a turn of the resistance around 121 (weekly and monthly R1) to test the strength of the present upward momentum. If this area is not breached in the nearest future, the bears will have an opportunity to push the price back to 118. Alternatively, the rate will be expected to re-challenge this year’s peak just below 122.

• Traders’ Sentiment

  The distribution between the long (52%) and short (48%) positions stays equal, as the market remains undecided regarding the pair. A similar situation is observed with the orders—51% set to buy and 49% set to sell the Greenback.

Gold consolidates around weekly S1

“Gold gets the strongest headwind from a firmer U.S. dollar and strengthening U.S. interest rates.”

- Australia & New Zealand Banking Group Ltd. (based on Bloomberg)

• Pair’s Outlook

  Gold was almost completely unchanged during the trading day on Tuesday. The bullion made an attempt to return back above the 2013 low and weekly S1, but these levels were strong enough to keep bulls under pressure. As a result, Gold is still trading around $1,175 level. Even though during holidays no major drivers for Gold are expected, technical indicators on both short and medium-term started giving signals to sell the metal. Therefore, we may see it falling down to the monthly PP in the foreseeable future.

• Traders’ Sentiment

  Distribution between opened positions for buying and selling Gold are remaining strongly positive in favor of latter, as bulls have a stable majority with 72% of all trades. Compared to yesterday, opened positions registered no changes.