Technicals in FX

Technical Analysis

EUR/USD

EUR/USD seems to be range bound

“Euro-area domestic demand later this year and in 2014 should be supported by the accommodative monetary-policy stance as well as the recent gains in real income owing to generally lower inflation.”
- ECB President (based on Bloomberg)

• Pair’s Outlook
  For the past 6 days pair is trading in rather tight range—between monthly R1 and weekly PP. Although short and long term technicals indicate strength of the pair it does not seems there is a strong enough catalyst in the market which could ignite a rally. Bounce for weekly PP and some short term rally could be expected, but it is unlikely advance above 1.339, at least for the time being. Dips should find support with 1.318.
• Traders’ Sentiment
  It seems that bears are pushing bulls back out of the market since share of bears in the market increased by 2% and at the moment they account for 63% of market participants. In addition to this, share of pending long orders decreased by 4% and is at 54% gauge today.

GBP/USD

GBP/USD dips to 20-day SMA
"There is now no doubt that consumer confidence has recovered strongly from the unparalleled trough of the last five years. It is the longer-term changes that mean far more than one single month's figures, and the current trend is definitely upwards."
- GfK (based on Reuters)

• Pair’s Outlook
  Pair received a bearish impetus from the Fibo 61.8% (mid June to beginning of July move) few days ago. It depreciated by 50 pips (on the open to close basis) then and almost 100 pips yesterday until it found support with the 20-day SAM where the pair is trading at the moment. In any case, pairs outlook remains bearish as 1.5191/119 seems wont be able to provide enough of a support.
• Traders’ Sentiment
  Open positions are changing hands rather often between the bears and the bulls lately. Bears now account for 59% of market participants. That is 4% less than yesterday. Bulls, however, cant manage to swing the distribution of pending orders in their advantage—it remains at 48% gauge.

USD/JPY

USD/JPY trading at monthly PP
“From here, traders, like the Fed, will be looking to the data to suggest the timing of the next move.”
CMC Markets (based on MarketWatch)

• Pair’s Outlook
  After a 200 pip dip in the end of the last week, pair found support with monthly PP and has been trading around it for the past 4 days. It seems that such neutrality is likely to persist further, although, judging from market sentiment dynamics, we might see some short term rallies which should be capped by 99.6/100.00 JPY. In case pair receives bearish impetus and 97.5 JPY fails to provide enough of a support, there is a chance it might trail down to 94 JPY.
• Traders’ Sentiment
  Bulls are maintaining a tight grip on the market—they account for 74% or market participants. However, for the first time in almost two weeks majority, even if slim, of pending orders (52%) are set to sell the greenback against the yen.

USD/CHF

USD/CHF remains at Fibo 23.6%

"It's another waiting day, we have a lot of important data points later in the week so people aren't going to change positions a lot today."
- J. Safra Sarasin (based on The Economic Times)

• Pair’s Outlook
  Similarly to some other pairs greenback-franc cross is trading in a rather narrow range for the past 5 days. However, short and medium term technicals point at weakness of the pair. In such case it could be sold off all the way to 5 month low at 91.3 cents. Short term rallies are rather unlikely, but, just in case, should be capped by the 94 cents.
• Traders’ Sentiment
  Situation in the market is remaining exactly the same for the third day in a row. Share of open long positions in the market holds at 72% level and pending long orders remain at 57% gauge.