Morning Forex Technical
'We may get a less aggressive Germany after the election. The position of the SDP is more pro Europe, they are in favour of eurobonds, and we may see less aggression on austerity towards Italy, Greece and Portugal.' - BNP Paribas (based on The Financial Times)
Pair has appreciated by almost 200 pips and at the moment is trading at the highest level since February, 2013. On it’s way it breached June and August highs. Although breaching monthly R2 seems achievable goal, it seems very unlikely that 2013 (January) high at 1.371 could be breached on the basis of this appreciation. In case the pair fails here, 1.345 could be a good interim support level.
Situation in the market has been rather similar for quite some time. Open positions skewed to the side of the bears by additional 2%. Taking in to the account that overall gauge is 69%, this increase is rather marginal. Distribution pending orders moved from being evenly distributed between the long and short traders, at the moment 55% of them are set to go long on the pair.
GBP/USD testing 2013 high
'The extent to which the weakness in the UK's productivity has been structural rather than cyclical has vital implications for the economy's growth potential and for policy.' - IHS Global Insight (based on Reuters)
Despite the slowing down in the past days, pair jumped by almost 250 pips, breached uptrend’s resistance and at the moment is testing 2013 (January) high. It might be we will see a minor setback while bulls will capitalize on their gains, but 1.616 should be breached soon putting 1.63 on the map. Failure at 1.616 could provoke a sell off to the prior to this jump levels at 1.58.
Situation in the market remains exactly the same as yesterday. Bears continue to hold 74% of all open positions on the pair and 58% of all pending orders are set in their favour as well.
USD/JPY dips below 55 and 100-day SMAs
'We are finally seeing a clear recovery in exports, led by a weak yen and a moderate global recovery. My biggest concern is the planned sales-tax increase next year. A recovery in exports will help cushion the impact but a higher levy could still be a big drag on the economy, while risks remain in Europe and emerging markets.' - Norinchukin Research Institute Co. (based on Bloomberg)
Weekly PP/20-day SMA seemed unbreachable point for the pair despite it’s mild prior bullishness. However, it seems to be recovering after hitting weekly S1/monthly PP. It should recover most of the losses today and advance above the 98.5 JPY in the nearest future. 100 JPY would become next major target after that. Second failure, could provoke a sell off to 97.5 JPY and then to 96 JPY afterwards.
It seems that bulls are recovering as their strengthened positions by additional 2% and at the moment they account for 62% of market participants. 58% of pending orders, which is also 2% more than yesterday, are set in favour of the bulls as well.
USD/CHF plummets through June and August lows
'The Fed is data-dependent. It does not act because the market wants it to. We continue to believe that tapering will only come when the White House/Congress can introduce a plan to replace some of the easy money that quantitative easing provides. As we go into debt ceiling discussions, that is unlikely to happen, which means no tapering until the data warrants it.' - Chapdelaine Foreign Exchange (based on Reuters)
Pair plummeted by more than 150 pips after hitting weekly and monthly PP/61.8% Fibo few days back. At the moment it is trading in the lowest levels since February, 2013. recovery above the mentioned august and June lows would uplift most of the risk and put and monthly PP/61.8% Fibo on the map once map. 0.917/19 area should not be much of a trouble on the ay there. Failure to do so, however, could send the pair trailing to 90 cent mark.
Swiss franc remains the most sold and greenback is second most bough major currencies across the board. As a consequence, 75% of all traders are holding long positions on the pair. Pending orders increased by additional 8% in favour of the bulls, at the moment the overall gauge is at 68%.