28/07/2016

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 28, 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 ↘ → →

“EUR/USD's rebound and break of 1.1059 minor resistance suggests that choppy fall from 1.1185 is completed at 1.0951.” – based on Action Forex

EUR/USD surges past 1.1050 on Wednesday

Level Rationale

■ R3 1.1234 100-day SMA

■ R2 1.1134/83 Weekly R2; monthly PP; Bollinger band; 55-day SMA; weekly R3

■ R1 1.1064/73 20 and 200-day SMAs

■ S1 1.1055 Weekly R1

■ S2 1.1005 Weekly PP

■ S3 1.0970 Bollinger band

Pair’s Outlook The common European currency scored major gains against the US

Dollar, as the currency exchange rate started Wednesday’s trading at

1.0987 and ended the trading session at 1.1058. During this surge, the

currency pair broke through two resistance levels, as first the weekly

pivot point at 1.1005 gave up, and afterwards the first weekly

resistance at 1.1055 was broken. However, the weekly R1 is also a part

of a larger resistance cluster, which is also made up of the 20-day SMA

at 1.1063 and 200-day SMA at 1.1073, and these resistances were

holding the pair back on Thursday morning.

Traders’ Sentiment SWFX traders have increased their bearish sentiment, as 53% of open

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

range have shifted and become bullish, as 52% of commands are 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 28, 2016

Sentiment Today Yesterday 5 days ago Positions -6% -2% 0%

4% -4% -26% Orders

Indicator 1D 1W 1MN

MACD (12; 26; 9) Sell Sell Sell

RSI (14) Neutral Neutral Neutral

Stochastic (5; 3; 3) Sell Sell Sell

ADX (14) Neutral Neutral Neutral

CCI (14) Neutral Neutral Neutral

AROON (14) Buy Buy Buy

Alligator (13; 8; 5) Sell Sell Sell

SAR (0.02; 0.2) Buy Sell Buy

Aggregate → ↘ →

GBP/USD to return under 1.32

Level Rationale

■ R3 1.3511 Weekly R3

■ R2 1.3390/1.3413 Bollinger band; weekly R2

■ R1 1.3261 Weekly R1

■ S1 1.3163/47 Weekly PP; 20-day SMA

■ S2 1.3011 Weekly S1

■ S3 1.2912/04 Weekly S2; Bollinger band

Pair’s Outlook A rather dovish FOMC stance and poor US fundamentals on

Wednesday caused the Greenback to weaken against the British Pound,

resulting in the Cable’s 90-pip rally. Nevertheless, the GBP/USD

currency pair still remains within its recent trading range, namely

between the 1.31 and the 1.3250 levels. The upper border is also

bolstered by the weekly R1, thus, we should see the Sterling edge lower

again today. Technical indicators are also in favour of the bearish

scenario, in which case the weekly PP and the 20-day SMA are to act as

the nearest support around 1.3155.

Traders’ Sentiment For two straight weeks now market sentiment barely changes. There

are currently 54% of traders being long the Pound (previously 55%),

while the number of sell orders increased from 52 to 64%.

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 28, 2016 07:30 GMT

“If the U.S. economy continues to grow despite the increased headwinds, slack in the labor market will diminish, and we expect the Fed to squeeze in one rate hike before the end of the year, most likely in December.” - Rabobank (based on Reuters)

Sentiment Today Yesterday 5 days ago Positions 8% 10% 4%

-28% -4% -18% Orders

Indicator 1D 1W 1MN

MACD (12; 26; 9) Sell Sell Sell

RSI (14) Neutral Buy Buy

Stochastic (5; 3; 3) Sell Neutral Sell

ADX (14) Sell Sell Neutral

CCI (14) Neutral Neutral Buy

AROON (14) Buy Buy Buy

Alligator (13; 8; 5) Sell Sell Sell

SAR (0.02; 0.2) Buy Sell Sell

Aggregate ↘ ↘ →

USD/JPY to continue sliding down

Level Rationale

■ R3 107.93/108.03 100-day SMA; Bollinger band

■ R2 107.33 Weekly R1

■ R1 106.04/65 55-day SMA; weekly PP; 38.20% Fibo

■ S1 105.11 Weekly S1

■ S2 104.36/08 Monthly PP; 20-day SMA; weekly S2

■ S3 102.90 Weekly S3

Pair’s Outlook The Buck managed to outperform the Japanese currency yesterday, but

barely succeeding in climbing over the 105.00 major level. Despite the

miraculous rally, the Yen is expected to post gains against the US Dollar

once again today, therefore, returning to the trading range between

104.00 and 105.00. A drop lower is unlikely, as the pair is supported by

a strong cluster around 104.20, formed by the weekly S2, the monthly

PP and the 20-day SMA. Technical indicators in the daily timeframe are

unable to confirm this scenario, but the weekly and the monthly ones

suggest the Greenback is to keep declining against the Yen.

Traders’ Sentiment Bullish traders’ sentiment remains unchanged at 56%, but the portion

of orders to acquire the US currency edged lower today, namely from

75 to 53%.

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 28, 2016 07:30 GMT

“The BOJ news tomorrow will trump the FOMC news last night/ An above consensus amount of stimulus would surely push dollar-yen higher.” - Westpac Banking Corp. (based on Bloomberg)

Sentiment Today Yesterday 5 days ago Positions 12% 12% 10%

6% 50% 30% Orders

Indicator 1D 1W 1MN

MACD (12; 26; 9) Buy Sell Sell

RSI (14) Neutral Neutral Neutral

Stochastic (5; 3; 3) Sell Sell Neutral

ADX (14) Neutral Sell Sell

CCI (14) Neutral Neutral Buy

AROON (14) Buy Buy Buy

Alligator (13; 8; 5) Buy Sell Sell

SAR (0.02; 0.2) Buy Buy Sell

Aggregate ↗ ↘ ↘

Gold surges to 1,338 on Wednesday

Level Rationale

■ R3 1,364.03 Weekly R3

■ R2 1,357.43 Bollinger band

■ R1 1,351.19 Weekly R2

■ S1 1,336.44 Weekly R1

■ S2 1,326/23 20-day SMA; weekly PP

■ S3 1,308.85 Weekly S1

Pair’s Outlook The yellow metal was stuck around the level of 1,320 for the past

sessions, and it seemed that it will not gain a new direction for some

time. However, during Wednesday’s trading session the metal surged

from 1,319.22 at the start of the session to 1,338.82 at the end of day’s

trading. During this climb the commodity moved past three resistance

levels, as the weekly PP was broken at 1,323.60. Afterwards, the price

passed the 20-day SMA at 1,325.56 and weekly R1 at 1,336.44. At the

start of Thursday’s trading session the metal remains flat at 1,338.75.

Traders’ Sentiment SWFX trader sentiment remains unchanged on Thursday, as 51% of

open positions remain long. In the meantime, pending orders in the

100-pip range are 63% 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 28, 2016 07:30 GMT

“Markets are wrestling with the feasibility of U.S. rate hikes in the remainder of the year and the Fed has displayed a persistent drive towards trying to ‘normalize’ rate policy despite the plethora of global risks.“ – based on Daily FX

Sentiment Today Yesterday 5 days ago Positions 2% 2% 2%

26% 30% 32% Orders

Indicator 1D 1W 1MN

MACD (12; 26; 9) Sell Buy Buy

RSI (14) Neutral Neutral Neutral

Stochastic (5; 3; 3) Sell Sell Sell

ADX (14) Neutral Neutral Neutral

CCI (14) Neutral Neutral Sell

AROON (14) Buy Buy Buy

Alligator (13; 8; 5) Neutral Buy Buy

SAR (0.02; 0.2) Sell 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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