Morning Forex Technical
EUR/USD rebounds from the 6 month high
'We expect today's FOMC minutes to side in favor with a September tapering, as long as the data continues to unfold as expected, and to reiterate that interest rates are on hold for an extended period.' - Scotia Bank (based on Reuters)
Pair did not manage to consolidate above the 6 month high and at the moment is trading supported by the 20-day SMA. Although short term technicals point at appreciation of the pair it seems that the pairs has topped out and should trail towards the 1.323. A strong bullish impetus from the 2day SMA (like a few days ago) remains a possibility, but once again the pair should show a solid close above the 6 month high to put higher resistance levels on the map.
It seems that some uncertainty is coming back in to the market. Basis form this is given by the fact that share of bears in the market decreased by 4% and is at 60% gauge at the moment and pending orders are perfectly evenly distributed between the long and short orders.
GBP/USD fails at weekly R1
'Manufacturers have seen a real upturn in fortunes this quarter. Domestic and export orders have rebounded almost across the board.' - CBI (based on Reuters)
Bulls lacked determination and did not manage to push the pair towards the 1.575. It failed at the weekly R1 and at the moment is supported by the weekly PP. If this peak is just an interim top we should see the pair dropping to 1.550, the are which should provide strong enough bullish impetus to push the pair back up. If the pair fails at 1.55 we should see it trailing at least till 1.540.
Bears remain dominant force in the market as they continue to hold 74% of all open positions in the market. Pending orders, however, are starting to skew in the favour of the bulls- now only 59% of pending orders, 4% less than yesterday, belong to the bears
USD/JPY aims at 98.5
'The Fed minutes reinforced that tapering could start in September and so we'll see further weakness that we saw early in the week in some of the Asian plays. But the yen's (weakness) is providing some support.' - Credit Suisse (based on Reuters)
After being depressed under it, the pair received a minor bullish impetus from the 20-day SMA. It should push the pair towards the 98.5 JPY, but it seems highly unlikely that the pair could excel above it, at least not very far. Similar view is given by the medium term technicals and it seems very likely that we will have to wait for the recovery, highlighted by the long term technicals, for some time more.
It seems that 2-3 day long bullish periods after a week long depreciation are enough to keep the pairs market sentiment at a strongly bullish, 70%, gauge. Clear majority, 67%, if to be exact of pending orders are in favour of the bulls as well
USD/CHF bounced from the 6 month low
'Fed uncertainty, mixed messages on the U.S. economy and U.S. interest rates below recent peaks gnawed at the greenback. Minutes that suggest the economy is not quite in taper shape would leave the greenback vulnerable.' - Western Union Business Solutions (based on Reuters)
Despite the recent bearishness, the pair found support with the 6 month low. It helped the pair to recover most of this weeks losses and should push it through the 20-day SMA. If the pair manages to do so, we should start paying closer attention to the 55 and 200day SMA area. In case 20-day SMA fails the pair it might dip to the 6 month low once more.
Despite the pair’s bearishness in the past weeks market sentiment remains strongly bullish at 71% of traders being long on the pair and 75% of all pending order set in their favour as well.