17/08/2016

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 17, 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 ↘ → →

“While euro ended the day well off its highs versus the U.S. dollar, the break above the 100-day SMA puts momentum clearly on the side of EUR/USD bulls.” – Kathy Lien (based on investing.com)

EUR/USD tests the 1.13 mark

Pair’s Outlook The common European currency surged and reached past the 1.13

mark against the US Dollar on Tuesday. However, the currency

exchange rate retreated from the high level of 1.1322, and it has

retreated back to the monthly R1 at 1.1263 by 5:00 GMT on

Wednesday, against which the rate is most likely to rebound.

Afterwards, the pair would move to the second weekly resistance at

1.1302 and test the 1.13 mark once again. In addition, a surge is also

possible due to the fact that the upper Bollinger band has moved

higher to 1.1318, compared to yesterday’s 1.1299.

Traders’ Sentiment SWFX traders continue to be bearish, as 61% of open positions were

short on Wednesday morning. In the meantime, pending commands

are 57% bearish.

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

■ R3 1.1383 Weekly R3

■ R2 1.1353 Monthly R2

■ R1 1.1302/18 Weekly R2; trend line; Bollinger band

■ S1 1.1232/00 Weekly R1; 100-day SMA; trend line;

■ S2 1.1155/49 20 and 55-day SMAs; weekly PP

■ S3 1.1107/1.1081 Monthly PP; 200-day SMA; weekly S1

Wednesday, August 17, 2016 07:30 GMT

Sentiment Today Yesterday 5 days ago Positions -22% -18% -16%

-14% -10% -14% 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 ↗ ↘ →

GBP/USD risks falling back under 1.30

Level Rationale

■ R3 1.3238 Weekly R3

■ R2 1.3168/70 Weekly R2; monthly PP

■ R1 1.3109 20-day SMA

■ S1 1.3046 Weekly R1

■ S2 1.2975 Weekly PP

■ S3 1.2861/53 Bollinger band; weekly and monthly S1s

Pair’s Outlook The fundamentals turned in Sterling’s favour on Tuesday and along

with the strong support cluster around 1.2850 caused a substantial rally

in the Cable. Consequently, the Pound almost completely erased all

previous week’s losses, having closed just on top of the weekly R1.

However, technical studies keep giving bearish signals, suggesting that

a correction after such a surge is likely to take place. A decline then

would cause the GBP/USD pair to fall back under 1.30. On the other

hand, a lot depends on the FOMC Minutes today, where a dovish

statement could spark more Pound-buying, with the ceiling seen as far

as 1.3170, where the weekly R2 coincides with the monthly PP.

Traders’ Sentiment Bullish sentiment worsened over the day, as 58% of all open positions

are now long. Meanwhile, the share of buy orders slid from 57 to 54%.

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 17, 2016 07:30 GMT

“The pound is likely to keep slipping towards $1.2798 as the U.K. economy faces the risk of a downturn and amid the prospect of further easing by the BOE.” - Mizuho Securities (based on Reuters)

Sentiment Today Yesterday 5 days ago Positions 16% 38% 34%

8% 14% 14% Orders

Indicator 1D 1W 1MN

MACD (12; 26; 9) Sell Sell Sell

RSI (14) Neutral Buy Buy

Stochastic (5; 3; 3) Sell Sell Sell

ADX (14) Sell Sell Neutral

CCI (14) Neutral Neutral Buy

AROON (14) Buy Buy Buy

Alligator (13; 8; 5) Sell Sell Sell

SAR (0.02; 0.2) Sell Sell Sell

Aggregate ↘ ↘ →

USD/JPY seen descending further

Level Rationale

■ R3 102.38/69 Weekly R1; 20-day SMA

■ R2 101.60 Weekly PP

■ R1 100.55 Weekly S1

■ S1 99.78 Weekly S2

■ S2 98.88/73 Monthly S1; Bollinger band; weekly S3

■ S3 97.22 Trend-line

Pair’s Outlook With the return of risk-off sentiment and relatively poor US inflation

data yesterday, the USD/JPY currency pair was close to touching the

99.50 level, but closed at 100.30. Risks of the Buck slumping below the

100.00 psychological level are even greater, while technical indicators

support this outlook with their bearish signs. The nearest level to

support the pair is located at 99.78, namely the weekly S2. In case

bears do take over the market, the decline is then likely to last until the

99.00 mark is reached, which is reinforced by the monthly S1, the

weekly S3 and the Bollinger band.

Traders’ Sentiment Bullish traders’ sentiment remains unchanged at 64%, but the number

of orders to purchase the US Dollar lost 17 percentage points. The

orders now take up 66% 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

Wednesday, August 17, 2016 07:30 GMT

“As long as markets continue to bet against a Fed rate hike anytime soon and the yen continues to ignore Japan's efforts to weaken it, dollar/yen could have significantly further to fall.” - Forex.com (based on Business Recorder)

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

32% 66% -20% Orders

Indicator 1D 1W 1MN

MACD (12; 26; 9) Sell Sell Sell

RSI (14) Neutral Neutral Neutral

Stochastic (5; 3; 3) Sell 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 continues to trade near the 1,340 level

Pair’s Outlook The yellow metal is trading near the weekly pivot point at 1,340.78

from the upside, as the metal was priced at 1,341.85 by 5:00 GMT on

Wednesday. However, the bullion surged previously on Tuesday, as it

jumped past the monthly pivot point at 1,345.31 and weekly R1 at

1,351.70 and reached the 1,357.99 level. As gold is once again stuck

between the two levels, and taking into account other factors, it is clear

that the commodity will surge at least back up to the monthly PP at

1,345.31 during today’s trading session.

Traders’ Sentiment SWFX traders are bearish on Wednesday, as 53% of open positions are

short. In the meantime, pending orders are 57% 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 17, 2016 07:30 GMT

“An increase in the amount of gold bullion held by GLD and other bullion ETFs does not cause the gold price to rise.” – Steve Saville (based on investing.com)

Sentiment Today Yesterday 5 days ago Positions -6% -4% -4%

14% 0% 2% 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) Neutral 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 1,364/68 Bollinger band; weekly R2

■ R2 1,351.70 Weekly R1

■ R1 1.345.31 Monthly PP

■ S1 1.340/39 Weekly PP; 20-day SMA

■ S2 1,324.40 Weekly S1

■ S3 1,317/13 Monthly S1; weekly S2; 55-day SMA; Bollinger band

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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