03/08/2016

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

Wednesday, August 03, 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 ↘ → →

“The EBA stress tests did not tell us something we didn’t know.” - based on Forex Crunch

EUR/USD above 1.12 mark on Wednesday

Pair’s Outlook The Euro surged against the US Dollar on Tuesday, as the currency

exchange rate moved from 1.1162 at the start of day’s trading to

1.1221 by the end of day’s trading. However, pair was struggling with

the 100-day SMA at 1.1236 on Tuesday, and it moved slightly lower on

early Wednesday morning, as the common European currency traded

at 1.1212 against the Greenback by 5:00 GMT on Wednesday.

Although, as daily aggregate technical indicators forecast a surge for

the pair today, the pair is most likely to test the resistance once more.

Traders’ Sentiment SWFX trader sentiment remains bearish on Wednesday, as 61% of open

positions are short. In the meantime, pending orders have become

more bearish, as on Wednesday 56% of pending commands were short,

compared to 53% on Tuesday.

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

Sentiment Today Yesterday 5 days ago Positions -22% -28% -16%

-12% -6% -10% Orders

Indicator 1D 1W 1MN

MACD (12; 26; 9) Buy Sell Sell

RSI (14) Neutral Neutral Neutral

Stochastic (5; 3; 3) Sell Sell Sell

ADX (14) Neutral Neutral Neutral

CCI (14) Sell Neutral Neutral

AROON (14) Buy Buy Buy

Alligator (13; 8; 5) Buy Sell Sell

SAR (0.02; 0.2) Buy Sell Buy

Aggregate ↗ ↘ →

Level Rationale

■ R3 1.1508 Weekly R3

■ R2 1.1353 Weekly R2

■ R1 1.1212/63 100-day SMA; Bollinger band; weekly R1

■ S1 1.1158 55-day SMA

■ S2 1.1107/1.1077 Weekly PP; 20 and 200-day SMA

■ S3 1.1017 Weekly S1

Wednesday, August 03, 2016 07:30 GMT

GBP/USD surges to 1.3350; is prepared for more

Level Rationale

■ R3 1.3481/41 Weekly R2; Jul high

■ R2 1.3400 Bollinger band

■ R1 1.3350/22 Weekly R1; 23.6% Fibo; resistance level

■ S1 1.3200/1.3170 Weekly and monthly PP; up-trend; 20-day SMA

■ S2 1.3100/1.3093 Weekly S1; support level

■ S3 1.2953/46 Weekly S2; Bollinger band

Pair’s Outlook Yesterday’s UK construction PMI was enough of a catalyst to push the

Cable out of the triangle. As a result of a positive surprise, the rate has

already touched upon the first bullish target at 1.3350, represented by

July 13 close and weekly R1. If today’s UK data is also strong and the US

releases remain neutral, the price will have a good chance of revisiting

July highs at 1.3480. Still, considering releases that are to come

tomorrow, we could observe a lull today, despite the usually influential

numbers that are to be published this Wednesday.

Traders’ Sentiment There is virtually no difference between the number of bulls and bears,

both camps hold exactly a half of the market. Similarly, the gap

between the buy and sell orders is also small—eight percentage points

in favour of the latter.

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

Wednesday, August 03, 2016 07:30 GMT

“Everyone had been quite positive on the dollar going into the FOMC and it didn't really deliver, so there's been a subsequent leakage of positions ever since.” - Altana (based on Reuters)

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

-8% -14% -24% 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) Sell Neutral Buy

AROON (14) Buy Buy Buy

Alligator (13; 8; 5) Neutral Sell Sell

SAR (0.02; 0.2) Buy Sell Sell

Aggregate ↘ ↘ →

USD/JPY probes 2014 low

Level Rationale

■ R3 105.70/21 Weekly R1; down-trend; 55-day SMA

■ R2 104.10 20-day SMA

■ R1 103.59/19 Weekly and monthly PP

■ S1 100.72/46 Weekly S1; 50% Fibo; 2014 low

■ S2 100.03/00 Psychological level; Bollinger band

■ S3 99.00/98.84 Weekly S2; monthly S1

Pair’s Outlook After a brief pause on Monday USD/JPY resumed the sell-off from 107.

However, right now the currency pair is facing a major demand area on

the outskirts of 100, created by the 2014 low and 50% retracement of

the 2012-2015 move at 107. A month ago a similar attempt of the pair

to break this level failed, but this time the support area has no

reinforcement in the form of the lower bound of the nine-month

bearish channel, which increases the chance of the bearish outcome. At

the same time, the technical indicators are mostly pointing lower.

Traders’ Sentiment Positioning in the market also favours a decline, as the US Dollar is

strongly oversold against the Japanese Yen: nearly two thirds of all

open positions are long. Meanwhile, the numbers of buy and sell

orders are perfectly equal.

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

Wednesday, August 03, 2016 07:30 GMT

“Japan’s exporters need an exchange rate in or around the 103s to be profitable, so Japanese authorities would probably like the yen a little weaker than the 102s. We’re at a level where verbal intervention is quite likely.” - Mizuho Securities Co. (based on Bloomberg)

Sentiment Today Yesterday 5 days ago Positions 28% 24% 16%

0% 4% -18% Orders

Indicator 1D 1W 1MN

MACD (12; 26; 9) Sell Sell Sell

RSI (14) Neutral Neutral Neutral

Stochastic (5; 3; 3) Neutral Sell Neutral

ADX (14) Neutral Sell Sell

CCI (14) Buy Neutral Buy

AROON (14) Buy Buy Buy

Alligator (13; 8; 5) Sell Sell Sell

SAR (0.02; 0.2) Sell Buy Sell

Aggregate → ↘ ↘

Gold struggles with resistance at 1,366

Pair’s Outlook The yellow metal surged on Tuesday from 1,353.69 to 1,362.77, and

the metal was volatile between the support level provided by the

monthly PP at 1,345.31 and the first weekly resistance at 1,366.07. The

resistance made the commodity move lower at the end of day’s trading

session, and gold continues to struggle with it on Wednesday, as the

metal was trading at 1,364.47 by 5:15 GMT. Daily aggregate technical

indicators forecast a surge for the commodity today, due to that it is

most likely that gold will soon break the resistance.

Traders’ Sentiment SWFX traders have increased their bearish stance on the pair, as 55% of

open positions were short on Wednesday morning. In the meantime,

pending orders were 58% 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

Wednesday, August 03, 2016 07:30 GMT

“If the performance of the current bull market actually matched that of the 70s, then prices should have risen about 1000%.” - Hubert Moolman (based on investing.com)

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

16% 24% 24% Orders

Indicator 1D 1W 1MN

MACD (12; 26; 9) Buy Buy Buy

RSI (14) Neutral Neutral Neutral

Stochastic (5; 3; 3) Sell Sell Sell

ADX (14) Neutral Neutral Neutral

CCI (14) Sell Neutral Sell

AROON (14) Buy Buy Buy

Alligator (13; 8; 5) Buy Buy Buy

SAR (0.02; 0.2) Buy Buy Buy

Aggregate ↗ ↗ ↗

Level Rationale

■ R3 1,409 Weekly R3; monthly R2

■ R2 1,379/89 Monthly R1; weekly R2; 2014 high

■ R1 1,366/69 Bollinger band; weekly R1

■ S1 1,345/36 Weekly and monthly PPs; 20–day SMA

■ S2 1,323/15 Weekly and monthly S1s

■ S3 1,304/1,296 Bollinger band; weekly S2; 55-day SMA

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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