Market Outlook and Comments

Technical Analysis EUR/USD EUR/USD rallies up to 1.3040 “The Italian situation won’t be resolved soon, so the euro malaise will continue. I think the ECB will consider rate cuts going forward. It’s unlikely there will be any euro-buying catalysts from the ECB meeting this week.” - Marito Ueda, FX Prime Corp. (based on Bloomberg) Pair’s Outlook EUR/USD has returned back to the down-trend at 1.3040 that now lies overhead, but the current bias is bearish, meaning we are more likely to see a sell-off here than a surge back above this line. However, development of a dip may not be rapid, since beneath the spot price lies the 200-day SMA at 1.2922/12, which usually is of interest to the market. Traders’ Sentiment Neutral traders’ sentiment towards EUR/USD is perfectly unchanged since yesterday, as 52% of traders are bullish on it and 48% foresee further depreciation of the single currency. The ratio of buy to sell orders is less stable, falling to 40% to 60% from 43% to 57%. GBP/USD GBP/USD pares losses “CAD, EUR, GBP, CHF and JPY are all held net short against the USD.” - ScotiaFX (based on CNBC) Pair’s Outlook Daily technical indicators turned bearish, implying that yesterday’s recovery does not mean a reversal, but is only a short-term bullish correction. Still, the rallies are to be capped by a strong resistance area at 1.5227/1.5175 and sent en route to 1.44890/44 through interim supports at 1.5080 and 1.4938. In the long run we may expect a decline down to 1.4231, the 33-month low. Traders’ Sentiment Popularity of the British Pound is plummeting, as less and less traders remain convinced that debasement of the currency will stop in the near future (53% on average in the whole market). The distribution between the longs and shorts on GBP/USD is 46% to 54% respectively. USD/JPY USD/JPY’s rally falters “We have promised to achieve 2 percent, making it clear in our joint statement to meet the target as early as possible. This is our pledge, so we'll do the utmost to achieve it.” - Hiroshi Nakaso, BOJ official (based on Reuters) Pair’s Outlook The currency pair again retreats, lacking upward momentum ahead of the key resistance zone that stretches from 95.00 down to 94.42 and is mainly formed by the up-trend resistance line. The present weakness could be stopped by 92.89/66, but a decline to 92.15/09 appears to be more likely, even though the weekly indicators continue giving ‘buy’ signals. Traders’ Sentiment An overwhelming majority of the SWFX marketplace participants (72%) believe the tendency of USD/JPY to rise is going to reveal itself once again, as they are holding long positions. The difference between the shares of buy (70%) and sell (30%) orders is unchanged. USD/CHF USD/CHF to extend surge “The central bank shouldn’t scale back its accommodative policy stance so as to support a stronger economic recovery and growth in employment.” - Janet Yellen, Federal Reserve Vice Chair (based on MarketWatch) Pair’s Outlook Yesterday the currency pair has confirmed a positive outlook by closing above the support at 0.9400/0.9387. This should now act as a springboard and push USD/CHF up to 0.9512, while the nearest resistances, specifically at 0.9450 and 0.9488, have a high chance of being neglected by the bulls. On the other hand, there is no consensus among the technical studies. Traders’ Sentiment Over the last 24 hours positioning of traders with respect to USD/CHF was not subject to drastic changes. The bulls stay in minority, constituting 38% of the market, whereas bears take up most of it—62%. Concerning orders, 71% of them are to buy the greenback against the Swiss Franc.