19/08/2016

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

Friday, August 19, 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 ↘ → →

“The euro strengthened 0.6% to $1.1354, climbing for a fifth day. The gains came even as meeting minutes showed the ECB “widely” agreed that their immediate reaction to the outcome of the U.K.’s referendum shouldn’t fuel excessive speculation about more stimulus.” – based on Bloomberg

EUR/USD reaches 1.1350 mark on Thursday

Pair’s Outlook The common European currency ended Thursday’s trading session at

the second monthly resistance at 1.1353 against the US Dollar, which

marked the fifth consecutive session of gains for the Euro. However, on

early Friday morning, the currency exchange rate has changed its

direction, as the resistance proved that it has enough strength to

change the pair’s direction. Due to that, the currency rate bounced off

the monthly R2 and traded at 1.1335 by 5:15 GMT on Friday, and it is

most likely to fall to the weekly R2 at 1.1302, where the rate might find

some support.

Traders’ Sentiment SWFX traders remain bearish on the pair, as 62% of open positions are

short on Friday morning. In the meantime, pending commands

remained unchanged, as 56% of pending orders are to sell.

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 1.1508 Monthly R3

■ R2 1.1383 Weekly R3; Bollinger band

■ R1 1.1353 Monthly R2

■ S1 1.1302 Weekly R2

■ S2 1.1263 Monthly R1

■ S3 1.1232/27 Weekly R1; 100-day SMA

Friday, August 19, 2016 07:30 GMT

Sentiment Today Yesterday 5 days ago Positions -24% -22% -22%

-12% -12% -14% Orders

Indicator 1D 1W 1MN

MACD (12; 26; 9) Buy Buy Sell

RSI (14) Sell Neutral Neutral

Stochastic (5; 3; 3) Sell Sell Sell

ADX (14) Neutral Neutral Neutral

CCI (14) Sell Sell Neutral

AROON (14) Buy Buy Buy

Alligator (13; 8; 5) Buy Neutral Sell

SAR (0.02; 0.2) Buy Buy Buy

Aggregate → → →

GBP/USD to remain at a two-week high

Level Rationale

■ R3 1.3487 55-day SMA

■ R2 1.3322/52 23.60% Fibo; Bollinger band

■ R1 1.3238 Weekly R3

■ S1 1.3170/68 Monthly PP; weekly R2

■ S2 1.3108 20-day SMA

■ S3 1.3046 Weekly R1

Pair’s Outlook The Cable managed to post more solid gain on Thursday, being driven

by a strong reading of the UK Retail Sales data earlier that day. With no

significant drivers present today, the GBP/USD currency pair is

expected to undergo a corrective decline, despite having opened right

on top of the weekly R2 and the monthly PP support cluster. Technical

indicators also support the possibility of the bearish outcome. In this

case, the nearest area to limit the losses rests around 1.31

psychological level, also bolstered by the 20-day SMA. A drop lower

would imply a retreat from a two-week high, with the weekly R1 at

1.3046 being the next target.

Traders’ Sentiment Bulls retreated again, as 56% of traders hold long positions (previously

59%). The portion of buy orders, however, edged up from 39 to 55%.

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

Friday, August 19, 2016 07:30 GMT

“So the only explanations for the weakness in the dollar aside from the skepticism of forex traders is positioning and the technical condition of the Dollar.” - BK Asset Management (based on PoundSterlingLive)

Sentiment Today Yesterday 5 days ago Positions 12% 18% 16%

10% -22% 8% 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) Neutral Sell Neutral

CCI (14) Sell Neutral Buy

AROON (14) Buy Buy Buy

Alligator (13; 8; 5) Sell Sell Sell

SAR (0.02; 0.2) Buy Sell Sell

Aggregate ↘ ↘ →

USD/JPY attempts to regain the bullish momentum

Level Rationale

■ R3 102.09/38 20-day SMA; weekly R1

■ R2 101.60 Weekly PP

■ R1 100.55 Weekly S1

■ S1 99.78 Weekly S2

■ S2 98.88/60 Monthly S1; Bollinger band; weekly S3

■ S3 96.99 Trend-line

Pair’s Outlook The Japanese Yen continued to outperform the American Dollar,

causing the pair to drop below the 100.00 major level, but with the

immediate support remaining intact. Earlier today the Buck managed to

begin appreciating against the Yen, despite poor risk environment, but

succeeding in climbing back above the 100.00 mark, for the time being

at least. The nearest resistance rests at 100.55, which could keep the

USD/JPY pair at bay and even trigger another sell-off, which is still

suggested by the technical indicators. In case bears manage to take

over the market, the immediate support at 99.78, namely the weekly

S2, risks getting breached, with the target shifting to 99.00.

Traders’ Sentiment Bullish market sentiment returned to its Wednesday’s level of 64%,

while the share of buy orders declined from 52 to 38%.

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

Friday, August 19, 2016 07:30 GMT

“I don’t think investors are buying the yen aggressively. To put it the other way around, there is no reason to buy the dollar and others in a positive manner.” - Marito Ueda, FX Prime (based on Market Watch)

Sentiment Today Yesterday 5 days ago Positions 28% 30% 28%

-24% 4% 32% Orders

Indicator 1D 1W 1MN

MACD (12; 26; 9) Sell Sell Sell

RSI (14) Buy Neutral Neutral

Stochastic (5; 3; 3) Sell Neutral Neutral

ADX (14) Sell Sell Sell

CCI (14) Buy Buy Buy

AROON (14) Buy Buy Buy

Alligator (13; 8; 5) Sell Sell Sell

SAR (0.02; 0.2) Sell Sell Sell

Aggregate ↘ ↘ ↘

Gold retreats on Friday morning

Pair’s Outlook The yellow metal did not manage to upkeep its surge on Friday, as the

yellow metal bounced off the weekly R1 at 1,351.70 and moved to

1,349.50 by 5:30 GMT. Although, the metal had already found support

in the monthly PP at 1.345.31 before 5:30 GMT, and daily aggregate

indicators forecast a surge for it during today’s trading session. Taking

into account those facts, it is most likely, that the metal will soon

resume to move northwards.

Traders’ Sentiment Traders are slightly bearish on the metal, as 52% of open positions are

short. In the meantime, pending orders to buy have increased by 3%

and are at 58%, compared to yesterday’s 55%.

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

Friday, August 19, 2016 07:30 GMT

“Gold continues to struggle near the 2011-2012 trendline but dips have been muted. As such, upside acceleration towards 1439 (measured move) is viewed as a distinct possibility sooner rather than later.” – Jamie Saettele (based on Daily FX)

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

16% 10% 14% 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) Sell 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 1,409.63 Monthly R2

■ R2 1,379/88 Weekly R3; monthly R1; 2014 high

■ R1 1,366/68 Bollinger band; weekly R2

■ S1 1,351.70 Weekly R1

■ S2 1.345/41 Monthly and weekly PPs; 20-day SMA

■ S3 1,324/13 Weekly S1 and S2; 55-day SMA; Bollinger band; monthly S1

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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