GBP/USD stuck in a tight range

Technical Analysis

EUR/USD climbed 330 pips in three days

“We’re getting the first reaction in the market to the better economic data, which is to buy the euro.”

- Citigroup (based on Bloomberg)

• Pair’s Outlook
  

  The single European currency jumped for a seventh day in a row versus the Greenback on Thursday. EUR/USD violated the weekly R3 at 1.12 and even attempted to test the next major resistance at 1.1257 (23.6% Fibo). However, the latter level managed to deal with significant bullish pressure and sent the Euro back towards 1.12. Despite gaining 500 pips in last seven days, the pair's up-trend may come to an end, unless it consolidates above 100-day SMA, which is currently located at 1.1294.

• Traders’ Sentiment

  Distribution between long and short positions at the SWFX market remains biased in favour of the latter, as bulls are currently in the minority with only 42% of all opened positions.

GBP/USD stuck in a tight range

“I maintain my belief that both the U.S. economy and the dollar will reassert themselves in due course, similar to what happened last year.”

- SLJ Macro Partners (based on CNBC)

• Pair’s Outlook
  

  Indeed, the Sterling suffered losses on Thursday, but was unable to erase Wednesday’s gains. The 200-day SMA provided strong resistance for the second time this week, forcing the GBP/USD pair to bounce back. Moreover, the 1.53 level was tested, as anticipated, but the Pound still closed slightly higher, at 1.5352. Technical indicators are still suggesting a rally to occur today. The fundamental data is expected to strengthen both currencies, thus the Cable is likely to remain trade within the borders of 1.53 and 1.54 levels, which are also backed by weekly R1 and R2, respectively.

• Traders’ Sentiment

  Today less traders are long the Sterling, only 40% (yesterday 44%). Meanwhile, the share of buy commands dropped from 47 to 33%.

USD/JPY keeps rising

“On short term immediate resistance is seen at 120, a break above will mean a retest of right shoulder at 121.”

- Societe Generale (based on FX Street)

• Pair’s Outlook

  After substantial volatility, USD/JPY surged above 119 once again. Initial resistance cluster around 119.20 failed to prevent the pair from gaining value; however, the 20-day SMA coped with this issue without difficulty. Furthermore, resistance around 119.85 was tested, whereas attempts to reclaim it will be made today. Technical indicators are showing mixed signs in the shorter timeframes, while in the longer ones signals remain bullish. The US Dollar is likely to extend the rally today, with the monthly PP acting as the immediate resistance; however, we might see the Greenback close around 120.

• Traders’ Sentiment

  Although not as strong as yesterday, but market sentiment remains bullish at 72%. The number of buy orders added 14% to 65%.

XAU/USD negates weekly gains

“There is definitely some debate around when the FOMC will move. We haven't seen any safe-haven demand come through, we're waiting on what happens in Greece and physical markets aren't that great.”

- ANZ (based on CNBC)

• Pair’s Outlook
  

  XAU/USD's decline continued on Thursday with even heavier losses. The yellow metal decided to return back below the 1,200 mark, while a drop was only stopped by the 2013 low at 1,180. Without any major technical impetus, this development has largely reflected the Fed's statement on Wednesday. At the moment Gold is under the risk of sliding below 1,180 in the short-term, unless it manages to bounce back above 1,194 (monthly PP), while bears are still likely to target the monthly S1 at 1,164 in the medium-term.

• Traders’ Sentiment

  Advantage of bulls over bears at the SWFX market is considerable at the moment, as the former are dominating by keeping 75% of all opened positions, up one additional percentage point from yesterday.