Forex Market Focus
EUR/USD. Analysts Comment on Further Direction of the Pair
According to analysts at Commerzbank, EUR/USD pair’s direction is quite indefinite; however there are some hints at it. The pair is consolidating above 55-day sliding midline at level 1.3864, but, as it appears, it won’t find solid ground above level 1.40 so far – there are a whole lot of resistance levels up to recent high at 1.4340. Dealers note that offers are currently seen at 1.4070/80 area. They also see strong offers associated with options starting from level 1.4070 and up to 1.4100. Stops are set above 1.4080 and 1.4090. As for down-trending motion, in case the pair breaks below level 1.3864, it may head to 1.3740 and 1.3619. Analysts at the bank prefer to use strategy of selling from level 1.3990, strengthening positions on the best rate, having stop loss set to 1.4090 and lowering target at 1.3690. Now EUR/USD is at 1.4055.
EUR/USD. Dealers and Analysts Comment
Euro attempted to grow during Asian trading session on the background of rumors about China’s GDP increase by 7.9%. However, those attempts were short-living and were soon replaced by downward correction. Currency strategists at Royal Bank of Scotland turn their attention to the fact that despite China’s reports were stronger than expected, market participants are much more concerned about real stability of economic progress in China. This way, analysts at RBS have an opinion that such GDP increase is a result of banks’ aggressive credit intervention over last months, but market participants are becoming more and more suspicious about the quality of credits. Nevertheless, profit surveys of American companies are likely to remain the main drivers of currency market for near future. And new pleasant surprises may support the pressure on USD. EUR/USD is currently holding ground near $1.4078, feeling the support from bids at $1.4060/50 area, where demand from Swiss bank is observed. Dealers also note the presence of stops in $1.4040/35 area; their execution may support fast-paced dropping of the pair. Meanwhile, offers are still seen at $1.4105/15 and $1.4135/40 areas. Analysts at German Helaba Landesbank Hessen-Thueringen warn that rising above resistance level $1.4122 may become a catalyst of new wave of Euro growth towards $1.46.
GBP/USD. Dealers Comment
Sterling’s inability of developing an upward motion above $1.6480 disappointed bulls and provoked some shortening of long positions, which went on further today after support at $1.6350 was broken. Drop below bids in stated area became a catalyst of avalanche-like execution of stops (which were placed below; near buy orders at $1.6325/2 and also in the figure area), which lead to setting session lows near $1.6282 by now. However, demand in this area proves to be strong enough to keep bears from advancing and now pair is holding ground at $1.6324. On top of that, dealers accentuate that meanwhile news regarding increased Swine influenza death count and IMF commentary on situation in Great Britain both look negative for GBP, the market situation is still favorable for bulls, which have somewhat activated under the 63rd figure. Yesterday profit surveys released by IBM and Google proved to be better than analysts expected. Dealers think that under condition of absence of strong negative news regarding economic statistics, GBP bulls may take advantage of increased risk appetite to resume advancing. However, they also warn that stops are seen under bids near $1.6280 too, and offers are now found around $1.6325 and $1.6350.
GBP/USD. Dealers Comment July, 20
British currency has started this new week with a quite positive sentiment, which also applies to other risky currencies that also rose against dollar on the background of positive dynamics at the stock markets. Another positive factor was that CIT Group managed to come to an agreement with their bondholders to avoid bankruptcy. As that news was released, GBP/USD confidently rose from levels near $1.6350 to $1.6410. After that a downward correction followed, which attracted new buyers, and so the pair has reached fresh session highs by now (according to dealers, this was conductive to closing of a fair amount of short positions upon repeated leap above $1.6400/05). The next obstacle on the bulls’ way is offers area near $1.6430, but the sentiment is still positive and breaking above will clear the road to $1.6450 and then to larger offers found at $1.6475/80. Stops are observed above the latter level, and dealers note that breaking above will be a signal of possible testing of recent highs.
GBP/USD. Technical View
GBP is holding ground above 21-day sliding midline at $1.6360 so far, which allows stating that pair’s prospects remain constructive enough and the bulls may attempt to advance towards $1.6565. On another hand, confident break down will imply risks of a deeper correction to 1.6268.
RES 4: $1.6744 – 30 June high
RES 3: $1.6640 – daily Bollinger band top
RES 2: $1.6565 – 76.4% of movement $1.6744–$1.5986
RES 1: $1.6559 – 20 July high
Current GBP/USD rate: $1.6360
SUP 1: $1.6360 – 21-day sliding midline
SUP 2: $1.6268 – 17 July low
SUP 3: $1.6143 – support line from 8 July
SUP 4: $1.6088 – Bollinger band bottom
EUR/GBP Rising Attempts Are Still Being Resisted
Another EUR/GBP upside rebound didn’t prove to be strong enough to pass recent highs near stg0.8700, and dealers note that events of last few days are signaling the weakening of bullish sentiment on the background of rather high interest in selling the Euro upon rising attempts. Today, the pair demonstrates drop again, and bids in stg0.8615/10 area are in danger now. Dealers note that break below the bids will clear the road down firs to stg0.8590, and then to stg0.8560/50. Offers are starting to accumulate around stg0.8630, meanwhile large orders remain in stg0.8645/50 area.
EUR/GBP. Dealers Comment July, 24
Meanwhile GBP/USD managed to stabilize itself and even to recover past losses to some extent, the Euro is still growing with an outperforming speed, taking into consideration more positive economic statistics over the EU-zone today as well as a moderate demand at the stock market. For these reasons, EUR/GBP has significantly risen in last few hours. Although the pair’s upside was somewhat suppressed near offers in stg0.8655/60 area, drop attempts didn’t disappoint the market participants and bids now start accumulating near stg0.8630 and in stg0.8615/10 area. Dealers don’t exclude a possible profit fixation by short-term accounts; however they also note that while the day’s end is still far enough, the signs of a potential bullish absorption are seen at daily graph. Dealers warn that a break above stg0.8660 will be a signal of another attempt to break through resistance near stg0.87. Successive break will state the presence of a potential for a new rising wave formation.
GBP/USD Forecast Remains Negative
The GBP has opened this week with a positive sentiment – having retraced from level 1.6380, the GBP/USD pair reached level 1.6500. Nevertheless, currency strategists at Commerzbank suppose that any upside will be suppressed at level 1.6585, which comprises 78.6% of Fibonacci retracement. Last week, GBP/USD pair repeatedly attempted to surpass that resistance, and failed nearly everytime. Commerzbank’s analysts have an opinion that this situation won’t change in near future, so they are consistent with a negative forecast. As for downward motion, Commerzbank accentuate level 1.6265 – if the pair fails to hold ground above this level, it will return to the lower part of recent range, and the next targets on the way down will be set to levels 1.6183 / 1.6021 / 1.5800 (the lower range boundary / 55-day sliding midline / 4-month uptrend line). Currently GBP/USD is trading near 1.6464.
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GBP/USD. Analysts Recommend Selling upon Retracement
GBP/USD pair is growing today. It has reached level 1.6400 by now. According to analysts at RBS, such retracement from support line allows selecting a strategy of selling the pair from slightly higher levels during the day. After GBP/USD pair broke 20-days sliding midline, the next resistance level is supposed to be found at 1.6458. If the pair gets over that level, then further up-trending motion towards level 1.6570 becomes possible. Taking to account all of above, currency strategists at RBS recommend selling GBP/USD with break target set to level 1.6000, but also mind possibility of drop to 1.5600/1.5200 area in middle-term perspective. Now GBP/USD is trading near 1.6310.