Weekly Market Report: EURUSD, GBPUSD, USDJPY
US dollar outperforms following better than expected NFP, Fed speak in focus this week.
EURUSD: Price below all its main moving averages following USD gains on NFP results
While the euro didn’t necessarily underperform against most of the remaining FX majors, against the rising US dollar it stood no chance. The greenback topped the performance charts following better than expected NFP figures, and as a result took this pair’s price crossing below its 50-day and 100-day moving averages. On the weekly, the technicals are turning more bearish once again having failed to successfully remain above its bear trend line, and with its price crossing back below the 200-week MA after having failed to close above the 50-week MA the week before. Furthermore, retail sentiment has shifted from what was a previous majority short 58% at the start of last week to a heavy long 66% as shorts take profit and longs hold on.
GBPUSD: Negative technical bias as its price hovers above its mid-term support level
Last week’s comments from the BoE’s Carney certainly put the pound in retreat, with rate cut likelihoods rising but not showing a majority for 2019, though there’s the October 31 Brexit deadline to contend with prior. From a technical standpoint the daily is showing a bear trend technical overview, while the weekly’s oscillatory moves are still relatively consolidatory and at an important mid-term support level. Fundamental items this week include UK GDP, manufacturing, and trade data. In terms of bias, retail sentiment has surged 14% to an extreme long 85% as shorts took profit on the move down towards the short and mid-term support level, while longs get squeezed.
USDJPY: Bearish technicals continue to stall as the greenback turns bid
Both daily and weekly technical overviews are showing a stalling bear trend, especially after last Friday’s NFP results took the greenback higher against the remaining FX majors. While a shift is likely if US data continues to keep Fed rate cut likelihoods at a minimum, more will be needed to cause it to tilt. Geopolitical tensions and disappointing US data this week could still give the safe haven yen a leg to stand on, but that means outside factors will carry more significance and should be noted prior to initiating a trade. Retail bias remains heavy long with little change from last week’s 69% heavy long bias, and more will be needed to push retail bias back towards the middle given where the bulk of longs have been initiated at.
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