25/04/2016

Technical Analysis

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

“Markets are convinced that the ECB will do more if it becomes necessary.” - Mizuho Corporate Bank (based on Reuters)

EUR/USD at 4-week low, supported by 1.1220

Level Rationale

■ R3 1.1403 Bollinger band

■ R2 1.1341 Weekly R1

■ R1 1.1279/88 Weekly PP; 20-day SMA

■ S1 1.1204/1.1192 Monthly PP; 55-day SMA

■ S2 1.1173/61 Bollinger band; weekly S1

■ S3 1.1099 Weekly S2

Sentiment Today Yesterday 5 days ago 10-day avg. Open Positions -12% -16% -16% -16%

Orders (±50 pips) 8% 8% -6% -12%

Orders (±100 pips) 10% 10% -10% -11%

Indicator Day Week Month

MACD (12; 26; 9) Sell Buy Buy

RSI (14) Neutral Neutral Neutral

Stochastic (5; 3; 3) Neutral Neutral Neutral

ADX (14) Neutral Neutral Sell

CCI (14) Buy Neutral Neutral

AROON (14) Sell Buy Sell

Alligator (13; 8; 5) Buy Buy Sell

SAR (0.02; 0.2) Sell Buy Sell

Aggregate → ↗ ↘

Pair’s Outlook Last Friday the EUR/USD pair traded down and closed at the 1.1220

mark, posting a more than 60-pip daily slump. Short-term upward

correction seems very possible, as the exchange rate has neared the

bunch of supports around 1.12, namely the monthly pivot point and 55-

day SMA. They are followed by the lower Bollinger band and weekly S1

at 1.1173 and 1.1161, respectively. Intraday dips below here would put

at risk the area around 1.1065 (200/100-day SMAs). Meanwhile, on the

topside the closest resistance is the weekly pivot and 20-day SMA at

1.1279/88.

Traders’ Sentiment The SWFX market is getting more positive with respect to the common

currency, as the number of long positions rose to 44% by the April 25

morning. This is up from 42% we had seen back on Friday.

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

Monday, April 25, 2016 07:30 GMT

“Maybe we could start to flirt with the idea the Fed could tighten again this year, and then we expect a recovery for the dollar.” - SEB (based on Bloomberg)

GBP/USD poised to begin correction

Level Rationale

■ R3 1.4615 Monthly R1

■ R2 1.4521/29 Down-trend; weekly R1

■ R1 1.4478 Bollinger band

■ S1 1.4428 100-day SMA

■ S2 1.4330 Weekly PP

■ S3 1.4267/49 20 and 55-day SMAs; monthly PP

Sentiment Today Yesterday 5 days ago 10-day avg. Open Positions 10% 10% 30% 20%

Orders (±50 pips) -2% -2% -30% 0%

Orders (±100 pips) -18% -18% -10% -1%

Indicator Day Week Month

MACD (12; 26; 9) Sell Buy Sell

RSI (14) Neutral Neutral Neutral

Stochastic (5; 3; 3) Neutral Neutral Buy

ADX (14) Neutral Sell Sell

CCI (14) Sell Neutral Buy

AROON (14) Buy Sell Sell

Alligator (13; 8; 5) Neutral Sell Sell

SAR (0.02; 0.2) Buy Sell Sell

Aggregate → ↘ ↘

Pair’s Outlook Although the Sterling was unable to maintain trade near the target area

of 1.4450 on Friday, trade still closed with the GBP/USD currency pair

retaking the 1.44 major level, also erasing all intraweek losses.

Furthermore, the Cable opened with a bullish gap today, inching closer

towards the resistance trend-line around the 1.45 mark, therefore, a

correction is likely to take place. The Bollinger band is providing

immediate resistance circa 1.4478, weighing on the pair, while the

nearest support is represented by the 100-day SMA at 1.4428. The

exchange rate, however, is expected to fall back towards the 1.44

psychological level.

Traders’ Sentiment Traders’ sentiment remains unchanged since Friday, with bulls still

taking up 55% of the market.

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

Monday, April 25, 2016 07:30 GMT

“I'm a bit skeptical about how long the yen's slide will continue. Financial markets appear to have a bleak view on the impact of negative interest rates on the economy.” - Societe Generale (based on CNBC)

USD/JPY struggles to retake 112.00

Level Rationale

■ R3 114.43/52 Weekly R2; monthly R1

■ R2 113.09/10 Bollinger band; weekly R1

■ R1 112.00/59 55-day SMA; down-trend; monthly PP

■ S1 110.63/04 Monthly S1; weekly PP; 20-day SMA

■ S2 109.13/108.70 Weekly S1; monthly S2

■ S3 107.63 18-month low

Sentiment Today Yesterday 5 days ago 10-day avg. Open Positions 46% 42% 46% 44%

Orders (±50 pips) 20% 20% -74% -12%

Orders (±100 pips) -6% -6% -66% -5%

Indicator Day Week Month

MACD (12; 26; 9) Buy Buy Sell

RSI (14) Neutral Neutral Neutral

Stochastic (5; 3; 3) Sell Neutral Neutral

ADX (14) Neutral Sell Sell

CCI (14) Sell Buy Buy

AROON (14) Buy Sell Sell

Alligator (13; 8; 5) Sell Sell Buy

SAR (0.02; 0.2) Buy Sell Sell

Aggregate → ↘ ↘

Pair’s Outlook The USD/JPY currency pair overperformed on Friday, as the Japanese

Yen lost more than 200 pips against the Buck on the negative loan rate

rumours. The Greenback, however, now faces a tough resistance area

around 112.30, namely the 55-day SMA, the down-trend and the

monthly PP, which is likely to cause the pair to make a U-turn. In this

case the monthly S1, the weekly PP and the 20-day SMA are to provide

support around 110.35, but technical indicators in the daily timeframe

are unable to confirm this scenario. As a result, the US Dollar could still

recover from its intraday low and surge approximately 50 pips, putting

the down-trend to a full-scale test.

Traders’ Sentiment Today there are 73% of traders having a positive outlook towards the

American Dollar, compared to 71% last Friday.

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

Monday, April 25, 2016 07:30 GMT

“Should the central bank continue to hint at further rate delays, we could see the dollar sell-off resume, in which case most commodity markets including gold could push higher.” - INTL FCStone (based on Reuters)

Gold closes below 55-day SMA, risks surge

Level Rationale

■ R3 1,258/59 Weekly R1; Bollinger band

■ R2 1,241/43 Monthly and weekly PPs

■ R1 1,235/37 55/20-day SMAs

■ S1 1,216/15 Weekly S1; Bollinger band

■ S2 1,200/1,198 Weekly S2; monthly S1

■ S3 1,173/70 Weekly S3; 100-day SMA

Sentiment Today Yesterday 5 days ago 10-day avg. Open Positions -28% -32% -18% -26%

Indicator Day Week Month

MACD (12; 26; 9) Buy Buy Buy

RSI (14) Neutral Neutral Neutral

Stochastic (5; 3; 3) Neutral Neutral Neutral

ADX (14) Neutral Buy Buy

CCI (14) Neutral Neutral Sell

AROON (14) Buy Buy Sell

Alligator (13; 8; 5) Neutral Buy Sell

SAR (0.02; 0.2) Sell Buy Buy

Aggregate → ↑ →

Pair’s Outlook A sharp drop of gold prices on Friday followed its inability to

consolidate above the 1,263 resistance one day before. With prices

plunging as low as 1,232 on the last day of the previous week, the

bullion created a dangerous precedent by closing below the 55-day

SMA for the first time since January. In case there is no rebound over

the next 24 hours, we are going to shift our attention to the 1,216

mark, namely nearest possible support represented by the lower

Bollinger band in cooperation with the weekly S1. Upward risks are

dampened, as there are formidable resistances located in the 1,235/43

range.

Traders’ Sentiment Bullish side gained only two pp from Friday until Monday, on top of two

pp it had added on Thursday-Friday. Now there are 36% of long

positions, meaning the bears are safeguarding a majority of 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

Monday, April 25, 2016 07:30 GMT

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

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