08/06/2016

Technical Analysis

EUR/USD GBP/USD USD/JPY XAU/USD

“Fluctuations in the price of crude oil continue to present a risk, particularly for the price projection, but on the whole appear balanced, as do the risks to economic growth.” - Bundesbank President Jens Weidmann (based on CNBC)

EUR/USD appreciates steadily on Tuesday

Level Rationale

■ R3 1.1616 May high

■ R2 1.1554 Weekly R2

■ R1 1.1450/65 Bollinger band; weekly and monthly R1s

■ S1 1.1308/1.1268 20 and 55-day SMAs; weekly and monthly PPs

■ S2 1.1196/84 100-day SMA; weekly S1

■ S3 1.1097/91 200-day SMA; Bollinger band

Sentiment Today Yesterday 5 days ago 10-day avg. Open Positions -12% -10% 0% -5%

Orders (±50 pips) -4% -12% 12% -5%

Orders (±100 pips) -2% -2% 0% -5%

Indicator Day Week Month

MACD (12; 26; 9) Sell Buy Buy

RSI (14) Neutral Neutral Neutral

Stochastic (5; 3; 3) Sell Buy Neutral

ADX (14) Neutral Neutral Buy

CCI (14) Sell Neutral Neutral

AROON (14) Buy Buy Buy

Alligator (13; 8; 5) Sell Buy Sell

SAR (0.02; 0.2) Buy Sell Sell

Aggregate ↘ ↗ →

Pair’s Outlook The European currency gained strength against the US Dollar on

Tuesday, as it appreciated from 1.1355 to 1.1374. In addition, the

movement north of the pair happened steadily without much volatility

and favouring the more conservative bulls. At the moment the currency

exchange rate is located between the monthly PP at 1.1282 and

monthly R1 at 1.1466. Moreover, the monthly PP and R1 are supported

by the weekly PP and R1 respectively at 1.1279 and 1.1463. If the pair

continues its movement upward it will also face the upper Bollinger

band at 1.1452.

Traders’ Sentiment SWFX traders became even more bearish on the pair, as already 56% of

open positions are short. Pending orders in the 50 and 100-pip range

are respectively 52% and 51% bearish.

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

Wednesday, June 08, 2016 07:30 GMT

GBP/USD muted during early trade

Level Rationale

■ R3 1.4805 Down-trend

■ R2 1.4770 May high

■ R1 1.4703/33 Weekly and monthly R2s; Bollinger band; 200-day SMA

■ S1 1.4545/28 Weekly and monthly PPs; 20-day SMA

■ S2 1.4421/14 Up-trend; 55-day SMA

■ S3 1.4363/33 Weekly S1; 100-day SMA; Bollinger band; May low

Sentiment Today Yesterday 5 days ago 10-day avg. Open Positions 16% 8% -8% 0%

Orders (±50 pips) 6% -28% -38% 3%

Orders (±100 pips) -2% -10% -22% 0%

Indicator Day Week Month

MACD (12; 26; 9) Sell Buy Buy

RSI (14) Neutral Neutral Neutral

Stochastic (5; 3; 3) Neutral Neutral Neutral

ADX (14) Neutral Neutral Sell

CCI (14) Neutral Neutral Neutral

AROON (14) Sell Buy Sell

Alligator (13; 8; 5) Neutral Neutral Sell

SAR (0.02; 0.2) Buy Sell Sell

Aggregate → → ↘

Pair’s Outlook With another substantial jump, the Cable was able to retake the 1.45

major level yesterday and even climb over the tough resistance around

1.4535. The same cluster now acts as the nearest support, but a lot

weaker than the ascending channel’s support line, which is located at

1.4421, also remaining bolstered by the 55-day SMA. Even though the

medium-term bias is bullish, the Sterling could still weaken and put the

trend-line to another test. Demand, represented by the immediate

support cluster might also be sufficient to cause the GBP/USD currency

pair to prolong its recovery, allowing it to climb at least 50 pips, until

the 1.46 level is reached.

Traders’ Sentiment Bulls grew stronger over the day, as 58% of traders are now long the

Pound (previously 54%). The share of sell orders slid from 55 to 51%.

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

Wednesday, June 08, 2016 07:30 GMT

“While I would expect more downside if the polls continue to show the ‘Leave’ campaign gathering momentum, the pound is likely to be very volatile in both directions over the next couple of weeks.” - OANDA (based on Market Watch)

USD/JPY poised for more weakness

Level Rationale

■ R3 109.82 Weekly R1

■ R2 109.23/52 Monthly PP; 20 and 55-day SMAs

■ R1 108.16 Weekly PP

■ S1 107.04/106.65 Bollinger band; monthly S1; 38.20% Fibo

■ S2 105.55 May low

■ S3 104.88 Weekly S1

Sentiment Today Yesterday 5 days ago 10-day avg. Open Positions 46% 44% 44% 46%

Orders (±50 pips) 12% -40% 30% -8%

Orders (±100 pips) -2% -46% -8% 10%

Indicator Day Week Month

MACD (12; 26; 9) Buy Buy Sell

RSI (14) Neutral Neutral Neutral

Stochastic (5; 3; 3) Neutral Neutral Buy

ADX (14) Neutral Neutral Sell

CCI (14) Buy Neutral Buy

AROON (14) Sell Sell Sell

Alligator (13; 8; 5) Neutral Sell Buy

SAR (0.02; 0.2) Sell Sell Sell

Aggregate → ↘ →

Pair’s Outlook The USD/JPY pair was rather subdued on Tuesday, as it experienced

only a slight downside reaction over the day, without reaching any

significant technical level. However, a stronger-than-expected Japanese

GDP figure earlier today boosted the Yen, causing the pair to drop

below the 107.00 mark. The support cluster around this area,

represented by the Bollinger band, the monthly S1 and the 38.20%

Fibonacci retracement is unlikely to let the exchange rate to keep

falling. A full recovery from its intraday low would not be a surprise,

however, technical indicators turned from bullish to mixed, meaning

that the bearish outcome is more probable.

Traders’ Sentiment Today 73% of all open positions are long (previously 72%), while the sell

orders are outnumbering the buy ones by only two percentage points.

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

Wednesday, June 08, 2016 07:30 GMT

“A June U.S. rate hike is now out of the question and the focus is whether the Fed provides any hints of a July hike. There are no major U.S. indicators until the Fed's policy meeting next week, and the dollar is likely to remain bearish until then.” - IG Securities (based on Reuters)

Gold surges to 1,249 on Tuesday

Level Rationale

■ R3 1,274.36/1,278.62 Weekly R2; monthly R1

■ R2 1,259.10 Weekly R1

■ R1 1,244.61 55-day SMA

■ S1 1,239.17/1,238.72 Monthly PP; 20-day SMA

■ S2 1,229.42/1,227.01 Weekly PP; 100-day SMA

■ S3 1,214.16 Weekly S1

Sentiment Today Yesterday 5 days ago 10-day avg. Positions -2% 2% 8% 2%

Indicator Day Week Month

MACD (12; 26; 9) Sell Sell Buy

RSI (14) Neutral Neutral Neutral

Stochastic (5; 3; 3) Sell Buy Neutral

ADX (14) Neutral Sell Buy

CCI (14) Neutral Buy Neutral

AROON (14) Sell Sell Buy

Alligator (13; 8; 5) Sell Buy Sell

SAR (0.02; 0.2) Buy Sell Buy

Aggregate ↘ → ↗

Pair’s Outlook The bullion broke the resistance put up by 55-day simple moving

average at 1,244.60 and booked gains on Tuesday. The yellow metal

started day’s trading at 1,243.85 and touched the 1,249.15 level. At the

moment, gold is trading at 1,248.34 against the US Dollar. In the

meantime, the metal faces no resistance up to the level of 1,259.11,

where the weekly R1 is located. On the other hand, the bullion might

fall and reach the monthly PP at 1,239.18. In addition, the aggregate

technical indicators support a downward move, as they forecast a fall

for gold today.

Traders’ Sentiment SWFX traders have shifted their positions and have become slightly

bearish with 51% of open positions being 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

Wednesday, June 08, 2016 07:30 GMT

“That's [Janet Yellen dropping her ’coming months’ promise] good news for gold, which has recently been under downward pressure due to Yellen’s hawkish stance and the elevated odds of an interest rate hike in June or July.” - Sunshine Profits (based on Investing.com)

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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