19/10/2015

Technical Analysis

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

Pair’s Outlook

Bears continued to dominate the EUR/USD currency pair on Friday.

The cross declined by additional 30 pips to reach the 1.1345 mark by

the end of the session. This event exposes the next demand area

around 1.13, which is guarded by the 20-day SMA and weekly S1 at

the moment. A failure here would imply an additional slump

towards 1.1240 (monthly PP; weekly S2; 55-day SMA). We expect

the weekly pivot point and monthly R1 at 1.1392/95 to weigh on the

Euro in the near term, despite daily technical indicators being bullish

on the matter.

Traders’ Sentiment

SWFX sentiment remains bearish in 57% all of cases, while the

majority of pending orders in 100-pip range from the spot price is

positive (53%).

“The recent gains in the value of the EUR are likely to have been a source of concern for ECB policymakers.” - Rabobank (based on WBP Online)

EUR/USD risks declining to 1.13

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

Level Rationale

■ Resistance 3 1.1482 Bollinger band

■ Resistance 2 1.1449 Weekly R1

■ Resistance 1 1.1392/95 Weekly PP; monthly R1

■ Support 1 1.1304/1.1289 20-day SMA; weekly S1

■ Support 2 1.1241/23 Weekly S2; monthly PP; 55-day SMA

■ Support 3 1.1173 100-day SMA

Monday, October 19, 2015 07:30 GMT

Net Sentiment Last 1 day ago 5 days ago 10-day avg.

Open Positions -14% -14% -8% -8%

Orders (±50 pips) 4% 12% 24% 14%

Orders (±100 pips) 6% 12% 22% 11%

Indicator/Period Day Week Month

MACD (12; 26; 9) Buy Sell Sell

RSI (14) Neutral Neutral Neutral

Stochastic (5; 3; 3) Neutral Neutral Neutral

ADX (14) Neutral Neutral Sell

CCI (14) Neutral Sell Neutral

AROON (14) Buy Buy Sell

Alligator (13; 8; 5) Buy Buy Sell

SAR (0.02; 0.2) Buy Buy Sell

Pair’s Outlook

The British currency was unable to pierce the resistance cluster at

1.5485, ultimately suffering a 34-pip decline. Not much has changed

over the weekend. Technical indicators remain unchanged, but the

resistance cluster strengthened, as the Bollinger band is now

bolstering it. At the same time, immediate support is now

represented by the 55-day SMA and the weekly PP around 1.54,

creating more space for a possible decline today. Even though the

Cable is expected to remain flat, a correction is still expected,

pushing the pair several pips higher.

Traders’ Sentiment

Bulls keep retreating, as only 53% of all positions are now long.

Meanwhile, the number of buy orders increased from 29 to 36%.

“Should you start to see the U.S. data continuing to be solid, particularly now with emerging markets finding a more stable footing, we might see the dollar starting to regain its poise if the market starts to price in some expectation that the Fed could still go in December.” - ANZ (based on Bloomberg)

GBP/USD remains stuck between 55 and 100-day SMAs

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

Level Rationale

■ Resistance 3 1.5688 Weekly R2

■ Resistance 2 1.5560/68 Weekly R1; 38.20% Fibo

■ Resistance 1 1.5488/1.5501 100-day SMA; monthly R1; Bollinger band

■ Support 1 1.5414/1.5380 55-day SMA; weekly PP

■ Support 2 1.5326/1.5252 20 and 200-day SMAs; monthly PP; weekly S1

■ Support 3 1.5185 23.60% Fibo

Net Sentiment Last 1 day ago 5 days ago 10-day avg.

Open Positions 6% 12% 24% 18%

Orders (±50 pips) -36% -27% 16% -5%

Orders (±100 pips) -28% -42% 20% -4%

Indicator/Period Day Week Month

MACD (12; 26; 9) Buy Sell Sell

RSI (14) Neutral Neutral Neutral

Stochastic (5; 3; 3) Sell Neutral Neutral

ADX (14) Neutral Neutral Sell

CCI (14) Sell Neutral Neutral

AROON (14) Buy Sell Sell

Alligator (13; 8; 5) Neutral Neutral Sell

SAR (0.02; 0.2) Buy Buy Sell

Monday, October 19, 2015 07:30 GMT

Pair’s Outlook

As was anticipated, improvements in the US fundamentals on Friday

caused the USD/JPY to overperform and breach the 119.20

resistance. The pair reached the set target of 119.70, but failed to

remain that high, falling back and settling at 119.40. The Greenback

is likely to undergo a correction today, with the nearest support now

located at 119.23 in face of the weekly PP. However, the Buck

remains quite volatile and could still surprise to the upside, while

technical studies are mostly supporting the bearish outcome.

Traders’ Sentiment

There are 70% of traders being long the US Dollar today, compared

to 73% on Friday. Meanwhile, the gap between the buy and the sell

orders remains minimal (2% points), with sellers in the majority.

“Even though the Bank of Japan has shown no sign that it is preparing new stimulative measures, many in the market, still smarting from last year's surprise expect additional easing to be announced at the end of the month.” - BBH (based on Reuters)

USD/JPY resumes journey to ten-month support

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

Level Rationale

■ Resistance 3 120.76/121.43 55 and 200-day SMAs; monthly R1; weekly R2

■ Resistance 2 120.41 Weekly R1

■ Resistance 1 119.86/93 20-day SMA; monthly PP

■ Support 1 119.23/118.97 Weekly PP; Bollinger band

■ Support 2 118.53/22 Monthly and weekly S1s

■ Support 3 117.19/04 Monthly and weekly S2s

Net Sentiment Last 1 day ago 5 days ago 10-day avg.

Open Positions 40% 46% 42% 44%

Orders (±50 pips) -2% -26% 32% 6%

Orders (±100 pips) -2% -4% 18% 17%

Indicator/Period Day Week Month

MACD (12; 26; 9) Buy Sell Sell

RSI (14) Neutral Neutral Neutral

Stochastic (5; 3; 3) Neutral Neutral Neutral

ADX (14) Neutral Sell Buy

CCI (14) Neutral Neutral Neutral

AROON (14) Sell Sell Buy

Alligator (13; 8; 5) Sell Sell Buy

Sell Sell Buy SAR (0.02; 0.2)

Monday, October 19, 2015 07:30 GMT

Pair’s Outlook

XAU/USD held above the crucial technical level on Friday, namely

the 200-day SMA at 1,175. However, in the beginning of the new

working week the bullion is losing steam and is highly likely to drop

below this important support. This fact may embark on a new

bearish trend in the foreseeable future, but we should see the Aug

high at 1,170 being violated first, before the final outlook decision is

made. Bulls' inability to reverse losses should reopen the 1,155/45

zone for bears, where weekly S1, 20-day SMA and monthly R1 are

presently located.

Traders’ Sentiment

The total number of long and short open positions in the SWFX

market remained flat in the past 72 hours. The former and the latter

are still holding 51% and 49% of them, respectively.

“Gold is tracking the dollar at the moment.” - a trader in Hong Kong (based on CNBC)

Gold to fall back below 200-day SMA

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

Level Rationale

■ Resistance 3 1,194 Bollinger band; weekly R1

■ Resistance 2 1,181 Monthly R2

■ Resistance 1 1,173/75 Weekly PP; 200-day SMA

■ Support 1 1,170 Aug high

■ Support 2 1,155/52 Weekly S1; 20-day SMA

■ Support 3 1,147 Monthly R1

Monday, October 19, 2015 07:30 GMT

Net Sentiment Last 1 day ago 5 days ago 10-day avg.

Open Positions 2% 2% 2% 3%

Indicator/Period Day Week Month

MACD (12; 26; 9) Sell Buy Buy

RSI (14) Sell Neutral Neutral

Stochastic (5; 3; 3) Neutral Neutral Neutral

ADX (14) Neutral Neutral Sell

CCI (14) Neutral Sell Buy

AROON (14) Buy Buy Sell

Alligator (13; 8; 5) Buy Sell Sell

SAR (0.02; 0.2) Buy Buy Sell

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

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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