14/07/2016

Technical Analysis

EUR/USD GBP/USD USD/JPY XAU/USD

“Nothing has changed on the daily chart of the EUR/USD forex market. It is still in its month-long trading range after what was probably an exhaustive sell climax.” – based on Brooks Price Action

EUR/USD surges to 1.1090 on Wednesday

Level Rationale

■ R3 1.1328/1.1341 Bollinger Band; weekly R3

■ R2 1.1229/64 55 and 100-day SMA; weekly R2

■ R1 1.1129/57 Monthly PP; 20-day SMA; weekly R1

■ S1 1.1079/88 200-day SMA; weekly PP

■ S2 1.0972 Weekly S1

■ S3 1.0929 Bollinger Band

Pair’s Outlook The Euro surged marked a session of gains against the US Dollar on

Wednesday, as the currency exchange rate increased from 1.1059 at

the start of day’s trading to 1.1090 at the end of the day. The pair

passed the weekly pivot point at 1.1079, and it stopped exactly at the

200-day simple moving average. Thursday morning, the rate is

continuing to move higher, as it reached 1.1108 mark by 4:45 GMT. On

the way up, the exchange rate is set to move to the monthly PP at

1.1149. However, the 20-day SMA at 1.1128 will likely show some

resistance to the pair.

Traders’ Sentiment SWFX traders continue to be bearish on Thursday, as 54% of open

positions are short. In the meantime, pending orders in the 100-pip

range are 56% short.

Dukascopy Bank SA, Route de Pre-Bois 20, International Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 research@dukascopy.com

Thursday, July 14, 2016 07:30 GMT

Sentiment Today Yesterday 5 days ago Positions -8% -6% -6%

-12% -26% -34% Orders

Indicator 1D 1W 1MN

MACD (12; 26; 9) Sell Buy Sell

RSI (14) Neutral Neutral Neutral

Stochastic (5; 3; 3) Sell Sell Sell

ADX (14) Neutral Neutral Neutral

CCI (14) Neutral Buy Neutral

AROON (14) Buy Buy Buy

Alligator (13; 8; 5) Sell Neutral Sell

SAR (0.02; 0.2) Sell Sell Buy

Aggregate ↘ → →

GBP/USD waits patiently for the BoE’s decision

Level Rationale

■ R3 1.3810/19 Weekly R3; monthly PP

■ R2 1.3566/76 Weekly R2; 20-day SMA

■ R1 1.3267 Weekly R1

■ S1 1.3033 Weekly PP

■ S2 1.2855 Trend-line

■ S3 1.2724 Weekly S1

Pair’s Outlook The British Pound weakened against the US Dollar on Wednesday,

ultimately closing with a 99-pip loss over the day, but without the

immediate support area being reached. Today risks are still skewed to

the downside, as the BoE is expected to cut its interest rate by half,

which is considered to be negative for the UK currency. As a result, the

Cable could fall back towards the 1.2855 level, where the one-year

support line is located. Technical indicators are in favour of this

outcome, but volatility could even stretch out further, namely towards

the 1.26 major level. On the other hand, a surprise of leaving the rates

unchanged would only prolong the Sterling’s bullish momentum.

Traders’ Sentiment Bullish traders’ sentiment returned to its Tuesday’s level of 64%, while

the portion of sell orders slumped from 74 to 52%.

Dukascopy Bank SA, Route de Pre-Bois 20, International Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 research@dukascopy.com

Thursday, July 14, 2016 07:30 GMT

“We think the pound's rally will run out of steam once investors learn that the economy is likely to slow down from the investment side, weakening employment and then finally consumption.” - Morgan Stanley (based on Reuters)

Sentiment Today Yesterday 5 days ago Positions 28% 20% 28%

-4% -48% -48% Orders

Indicator 1D 1W 1MN

MACD (12; 26; 9) Sell Sell Sell

RSI (14) Neutral Buy Neutral

Stochastic (5; 3; 3) Sell Neutral Sell

ADX (14) Neutral Sell Neutral

CCI (14) Neutral Buy Buy

AROON (14) Buy Buy Buy

Alligator (13; 8; 5) Sell Sell Sell

SAR (0.02; 0.2) Sell Sell Buy

Aggregate ↘ → →

USD/JPY remains on the back foot

Level Rationale

■ R3 108.70 100-day SMA

■ R2 106.05/65 Bollinger band; 55-day SMA; 38.20% Fibo

■ R1 105.07 Weekly R3

■ S1 104.36/103.94 Monthly PP; weekly R2

■ S2 103.14 20-day SMA

■ S3 102.26 Weekly R1

Pair’s Outlook Neither the immediate resistance nor the support areas were pierced

yesterday, with the Greenback ultimately remaining relatively

unchanged against the Yen. Although the Buck failed to make a solid U-

turn, more bearish momentum could still follow today, as the overall

trend remains bearish until the key resistance area around 109.00 is

breached. Meanwhile, technical indicators are giving bearish signals,

also suggesting the USD/JPY currency pair is to suffer a loss today. The

main target below currently is the 20-day SMA around 103.14, but it is

uncertain whether there is sufficient impetus for a strong decline below

114.00.

Traders’ Sentiment Bulls keep losing numbers, as 61% of all open positions are now long

(previously 63%). The share of buy orders edged up from 44 to 59%.

Dukascopy Bank SA, Route de Pre-Bois 20, International Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 research@dukascopy.com

Thursday, July 14, 2016 07:30 GMT

“Stimulus expectations are behind the yen's decline, but the biggest factor is the firmness in stocks. Global improvement in risk sentiment also drove yen weakness. But the yen's uptrend remains as markets lack sufficient material to justify that the trend has reversed.” - Ueda Harlow (based on Business Recorder)

Sentiment Today Yesterday 5 days ago Positions 22% 26% 36%

18% -12% 22% Orders

Indicator 1D 1W 1MN

MACD (12; 26; 9) Sell Sell Sell

RSI (14) Neutral Buy Neutral

Stochastic (5; 3; 3) Sell Neutral Neutral

ADX (14) Neutral Sell Sell

CCI (14) Sell Neutral Buy

AROON (14) Buy Buy Buy

Alligator (13; 8; 5) Sell Sell Sell

SAR (0.02; 0.2) Buy Buy Sell

Aggregate ↘ → ↘

Gold regains losses on Wednesday

Level Rationale

■ R3 1,421.76 Weekly R3

■ R2 1,382/98 Monthly and weekly R1s; 2014 high; Bollinger Band; weekly R2

■ R1 1,358.76 Weekly PP

■ S1 1,342.44 Weekly S1

■ S2 1,319/23 Weekly S2; 20-day SMA

■ S3 1,302.78 Weekly S3

Pair’s Outlook After falling on Tuesday, the yellow metal rebounded on Wednesday,

as, after reaching the weekly low level of 1,331.66, the metal surged to

1,342.44, where it met with resistance put up by the weekly S1 exactly

at that point. On Thursday morning, the commodity has bounced off

the weekly S1, and it has dropped to 1,337.20 level by 5:00 GMT. From

the lower side, the metal faces the 20-day SMA at 1,325.53 and the

weekly S2 at 1,319.10. In the meantime, daily aggregate technical

indicators forecast a surge for gold today.

Traders’ Sentiment SWFX traders are still short on the yellow metal, as 58% of open

positions are bearish. In the meantime, pending orders in the 100-pip

range are 68% long.

Dukascopy Bank SA, Route de Pre-Bois 20, International Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 research@dukascopy.com

Thursday, July 14, 2016 07:30 GMT

“A multi-decade rise in gold stocks versus all other assets is likely beginning. Institutional money managers are buying on days of strength, weakness, and sideways price action!” – Steward Thomson (based on investing.com)

Sentiment Today Yesterday 5 days ago Positions -16% -18% -30%

36% 42% 24% Orders

Indicator 1D 1W 1MN

MACD (12; 26; 9) Buy Buy Buy

RSI (14) Neutral Sell Neutral

Stochastic (5; 3; 3) Sell Sell Sell

ADX (14) Buy Neutral Neutral

CCI (14) Neutral Sell Sell

AROON (14) Buy Buy Buy

Alligator (13; 8; 5) Buy Buy Buy

SAR (0.02; 0.2) Buy Buy Buy

Aggregate ↗ → ↗

Signals Buy – the pair shows a clear uptrend Sell – the pair shows a clear downtrend Neutral – no specific trend for the pair Chart SMA (55) – Simple Moving Average of 55 periods SMA (200) – Simple Moving Average of 200 periods Indicators MACD – Moving average convergence divergence – momentum indicator RSI – Relative strength index – compares the magnitude of recent gains to recent losses in attempt to determine ‘overbought’ and ‘oversold’ conditions of the asset Stochastic – technical momentum indicator that compares a currency pair’s closing price to its price range over a given time period ADX – Average directional index – trend strength indicators CCI – oscillator used in technical analysis to help determine when a currency has been overbought or oversold SAR – trending indicator – shows the direction of a trend AROON – measures strength of a trend and likelihood that it will continue Alligator – trending indicator demonstrates presence of a trend and its direction Forecasts

Third Quartile – separates 25% of the highest forecasts

Second Quartile – the median price based on the

projections of the industry

First Quartile – separates 25% of the lowest forecasts

EXPLANATIONS

Dukascopy Bank SA, Route de Pre-Bois 20, International Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 research@dukascopy.com

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