Morning Forex Technical
EUR/USD to turn back at 1.3300/22
'Euro weakness is likely to stay with us. A bearish EUR/USD call is starting to work out as the market values European Monetary Union tail risks more realistically' - Morgan Stanley (based on CNBC)
Industry outlook
EUR/USD is anticipated to overcome an initial resistance at 1.3235/50 and then fail at 1.3300/22. Afterwards it is expected to slide down to 1.2974. Below the latter level the pair will target 1.2891/54 en route to 1.2775.
Traders' sentiment
Disposition of traders on EUR/USD currency pair is little changed since the previous day. 42% of traders are holding long positions and 58% of them are staying short.
Long position opened
Leading market participants, who have entered EUR/USD market with a buy trade, are expecting to close their positions at the key resistances at 1.3290, 1.3344 and 1.3396.
Short position opened
In case of dips, another rally may start after rebounding from the initial support level at 1.3184. However, assuming that the bearish momentum does not weaken, investors will pay attention to the lower support levels at 1.3132 and 1.3078.
EUR/JPY is testing 106.02
'We should have a bit of positive sentiment for the euro over the rest of this week as the market still seems a little short' - JPMorgan Chase & Co. (based on Bloomberg)
Industry outlook
EUR/JPY is currently approaching a formidable resistance situated at 106.02 and may not overcome it at the first try. Near-term supports are located at 105.41, 104.81 and 103.90, while 102.01 is a key level.
Traders' sentiment
Traders' sentiment has turned bearish on EUR/JPY, as more market participants (60%) have preferred to acquire the Japanese Yen against the Euro.
Long position opened
Initial resistance area for the pair is situated at 106.01. Subsequent goals for the bullish market payers may be found at 106.49 and 106.97.
Short position opened
The immediate support line is at 105.05. Should the price step even lower, it will encounter subsequent levels at 104.57 and 104.09, where recovery might start.
GBP/USD to remain below 1.5913
'I can't see [British Pound] breaking through $1.6000 against the dollar in the near-term' - Adrian Schmidt, currency strategist at Lloyds Banking Group (based on Reuters)'I can't see [British Pound] breaking through $1.6000 against the dollar in the near-term'
Industry outlook
The price tumbled just before hitting 1.5913 (200 day ma) and is now expected to penetrate support at 1.5727. Subsequent levels at 1.5645 and 1.5580 should follow due to negative short- and long-term outlooks.
Traders' sentiment
The Cable remains overbought, since the majority of traders (75%) are holding short positions, expecting the American Dollar to appreciate relative to the British Pound.
Long position opened
Investors should pay attention to the identified with the help of the standard pivot point method resistance zones, as they might be useful during intraday trading. The initial resistance level is at the level of 1.5837, whereas R2 and R3 are situated at 1.5896 and 1.5929, accordingly.
Short position opened
Major FX traders expect the price to test the initial support level at 1.5745. The breakout of this line will pave the way for the price to test S2 at 1.5712 and S3 at 1.5653.
USD/JPY challenges 79.93/80.25
'The stronger the U.S. economy, the stronger the sense that the interest-rate story will turn around and some of the strength in JPT relative to the USD starts to reverse course' - Barclays Capital (based on Bloomberg)
Industry outlook
Bullish momentum of the currency pair is not weakening and is expected to persist. After breaching resistance zone at 79.93/80.25 USD/JPY is likely to surge up to 82.80. Dips should by contained by supports at 79.63/43 and 78.41/29.
Traders' sentiment
Bullish traders' sentiment remains stable on USD/JPY currency couple, as 81% of traders' have entered the market with a buy trade, while only 19% of them consider the pair bearish.
Long position opened
Major market participants are likely to close their long positions at the key resistance levels. The primary short-term target will be reached at 79.87. The breakout of this level will pave a way for a bullish run up to 80.00 and then to 80.17.
Short position opened
Major dealers are planning to partially close their short positions if the pair touches upon the first support level at 79.57. However, if the bearish impetus proves to be strong enough, some of the positions could be squared off at S2 of 79.40 and at S3 of 79.27.
USD/CHF to hover above 0.9080/66
'Fed directors noted that recent economic data had improved somewhat, but they were cautious about the outlook and expected only moderate growth over the coming quarters' - Fed meeting minutes
Industry outlook
USD/CHF has retested a tough support at 0.9080/66 and should hold above it for now. However, failure here would imply a sell off down to 0.8960 or even 0.8787/67 (200 day ma). Resistances at 0.9300, 0.9314 and 0.9317/31 presently cap the price.
Traders' sentiment
The share of long positions on USD/CHF has increased. At the moment bulls constitute 88% of the market, whereas bears form merely 12% of it
Long position opened
The initial resistance level for the pair is 0.9153. If the price continues increasing, the investors will hold longs until the pair climbs up to 0.9183 or 0.9219.
Short position opened
Bearish traders will pay attention to the key support levels to close their deals. The forecast targets are 0.9087, 0.9051 and 0.9021.
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