23/03/2012

Technical Analysis

Industry outlook

The outlook for EUR/USD is deemed to be bearish due to a

formidable resistance located at 1.3487. Recently the pair has

bounced off 1.3291/1.3325 and is now expected to pierce

through 1.3112 (55 day sma) while being on the way towards

1.3004.

Traders’ sentiment

Traders’ sentiment is currently mixed on EUR/USD currency

pair, since the share of long and short positions on the market is

nearly the same, being 47 and 53 per cent, accordingly.

Long position opened

The break of the short-term resistance line 1.3258 would pave

the way for the pair to rise up to 1.3316. The clearance of the

second daily resistance level would establish a new target for

traders at 1.3379.

Short position opened

Bearish traders will pay attention to the key support levels in

order to close their deals. The primary forecast target is 1.3137.

If the pair erodes this level, then it might rebound from S2 of

1.3074 or S3 of 1.3016.

EUR/USD

“We see scope for EURUSD to trade lower in the coming weeks, based on the risk that Treasury yields will overshoot to the upside relative to what we regard as realistic Fed policy expectations" - BNP Paribas (based on CNBC)

EUR/USD to slide down

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Friday, March 23, 2012 08:00 GMT

Trends

Daily

Weekly Monthly

Resistance 3 1.3379 1.3431 1.4058

Resistance 2 1.3316 1.3311 1.3772

Resistance 1 1.3258 1.3243 1.3547

Pivot Point 1.3195 1.3123 1.3261

Support 1 1.3137 1.3055 1.3036

Support 2 1.3074 1.2935 1.2750

Support 3 1.3016 1.2867 1.2525

Industry outlook

Even though support at 108.71 managed to halt EUR/JPY from

nose-diving further, it is likely to be breached in the nearest

future. This would allow for the pair to dip to 106.08 (uptrend

supports).

Traders’ sentiment

The portion of bulls has diminished to 44%, whereas bears now

constitute 56% of the total amount of traders who have opened

positions on EUR/JPY.

Long position opened

Largest brokers set a new long position target as a break of

110.11 may become an encouraging bullish sign en route to

111.27. If the uptrend remains, the third target for intraday

trading will be 112.09.

Short position opened

A part of the brokers will close their short positions near initial

support level at 108.13. In case of downtrend continuation, the

pair might rebound from the S2 at 107.31 or S3 at 106.15.

“Weak data is giving traders an opportunity to take profits. If the recent falls end as a mere correction, the subsequent rally would be stronger thanks to this pullback” - BTM UFJ (based on CNBC)

EUR/JPY to show more weakness

Trends

Daily

Weekly Monthly

Resistance 3 112.09 113.22 123.00

Resistance 2 111.27 111.60 116.48

Resistance 1 110.11 110.76 112.29

Pivot Point 109.29 109.14 105.77

Support 1 108.13 108.30 101.58

Support 2 107.31 106.68 95.06

Support 3 106.15 105.84 90.87

Friday, March 23, 2012 08:00 GMT EUR/JPY

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

Industry outlook

GBP/USD has low chances of eroding 1.5927/92 and thus will be

headed towards 1.5760/45, which guards lower levels at 1.5643

and 1.5599. In the long-run (within three months from now) the

pair is targeting 1.5235.

Traders’ sentiment

There has been no change in traders’ sentiment towards GBP/

USD. Shorts still form 73% of the market, while longs compose

only 27% of it.

Long position opened

The price might rebound from the first resistance level at

1.5883, so major dealers are planning to close some of their

long positions near this level. Subsequent goals for bulls are

1.5948 and 1.6004.

Short position opened

Largest investors might have placed their take profit orders at

the key support levels. These levels for intraday trading are

situated at 1.5762, 1.5706 and 1.5641.

GBP/USD to be rejected by 1.5927/92

Trends

Daily

Weekly Monthly

Resistance 3 1.6004 1.6194 1.6404

Resistance 2 1.5948 1.6028 1.6197

Resistance 1 1.5883 1.5935 1.6057

Pivot Point 1.5827 1.5769 1.5850

Support 1 1.5762 1.5676 1.5710

Support 2 1.5706 1.5510 1.5503

Support 3 1.5641 1.5417 1.5363

“The outlook for sterling depends on the economy - it could take a long time for recovery to take root, and sterling probably will only rally when there are signs that's happening” - Societe Generale (based on Reuters)

Friday, March 23, 2012 08:00 GMT GBP/USD

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Industry outlook

Key support at 82.38/23 should withstand present bearish

pressure in order for the pair to be able to recommence its

advancement after correction is over. The initial resistance is

situated at 83.02, followed by 83.98 and 84.51.

Traders’ sentiment

USD/JPY remains overbought, since the amount of bullish

market participants (72%) greatly exceeds the amount of

bearish ones (28%).

Long position opened

FX market participants have put their take profit orders at the

key resistance points of intraday trading. Some of the investors

might close their deals at 83.22 and 83.91. The highest level is at

84.36.

Short position opened

Major market participants with short positions will hold their

deals until the price slides down to the initial support level at

82.08. If the price continues the downtrend, the dealers might

wait for the Greenback to depreciate down to 81.63 or 80.94.

“We like the idea of the U.S. dollar becoming stronger over the year. There is a divergence between the two economies, with the U.S. recovery and not quite as compelling a story in Japan" - Westpac Banking Corp. (based on Bloomberg)

USD/JPY to trade above 82.38/23

Trends

Daily

Weekly Monthly

Resistance 3 84.36 86.64 88.83

Resistance 2 83.91 85.40 85.25

Resistance 1 83.22 84.43 83.19

Pivot Point 82.77 83.19 79.61

Support 1 82.08 82.22 77.55

Support 2 81.63 80.98 73.97

Support 3 80.94 80.01 71.91

Friday, March 23, 2012 08:00 GMT USD/JPY

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

Industry outlook

The pair is currently moving away from 0.9066 and will soon

encounter 0.9206 (20 day sma). Overcoming the latter level

would increase the possibility of extension of the rally up to

0.9342 and 0.9595.

Traders’ sentiment

According to SWFX sentiment index, the majority of traders

(70%) have preferred to open bullish positions on USD/CHF,

expecting the US Dollar to gain in value.

Long position opened

Bullish investors should pay attention to the key resistance

levels for intraday trading. R1 is situated at 0.9175, followed by

R2 and R3 at 0.9218 and 0.9258, respectively.

Short position opened

In case of dips, another rally may start after rebounding from

the initial support level at 0.9092. However, assuming that the

bearish momentum does not weaken, investors will pay

attention to the lower support levels at 0.9052 and 0.9009.

“The minimum exchange rate of 1.20 francs per euro remains front and center of the SNB’s monetary policy” - SNB (based on Bloomberg)

USD/CHF to challenge 0.9206

Trends

Daily

Weekly Monthly

Resistance 3 0.9258 0.9472 0.9621

Resistance 2 0.9218 0.9403 0.9460

Resistance 1 0.9175 0.9278 0.9252

Pivot Point 0.9135 0.9209 0.9091

Support 1 0.9092 0.9084 0.8883

Support 2 0.9052 0.9015 0.8722

Support 3 0.9009 0.8890 0.8514

Friday, March 23, 2012 08:00 GMT USD/CHF

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

EUR/USD 1 day

Outlook

1 week

Outlook

1month Outlook

MACD (12; 26; 9) BUY BUY SELL

RSI (13) NEUTRAL NEUTRAL NEUTRAL

Stochastic (5; 3; 3) SELL NEUTRAL NEUTRAL

ADX (13) NEUTRAL NEUTRAL NEUTRAL

CCI (13) NEUTRAL NEUTRAL NEUTRAL

SAR (0.02; 0.2) BUY BUY SELL

AROON (14) NEUTRAL NEUTRAL NEUTRAL

Alligator (13; 8; 5) BUY NEUTRAL SELL

GBP/USD 1 day

Outlook

1 week

Outlook

1 month

Outlook CD (12; 26; 9) BUY BUY BUY

RSI (13) NEUTRAL NEUTRAL NEUTRAL

Stochastic (5; 3; 3) NEUTRAL NEUTRAL NEUTRAL

ADX (13) NEUTRAL NEUTRAL NEUTRAL

CCI (13) NEUTRAL NEUTRAL NEUTRAL

SAR (0.02; 0.2) BUY BUY SELL

AROON (14) NEUTRAL NEUTRAL NEUTRAL

Alligator (13; 8; 5) NEUTRAL BUY NEUTRAL

USD/JPY 1 day

Outlook

1 week

Outlook

1 month

Outlook MACD (12; 26; 9) SELL BUY BUY

RSI (13) NEUTRAL BUY NEUTRAL

Stochastic (5; 3; 3) SELL BUY NEUTRAL

ADX (13) NEUTRAL BUY SELL

CCI (13) NEUTRAL SELL NEUTRAL

SAR (0.02; 0.2) BUY BUY SELL

AROON (14) NEUTRAL BUY SELL

Alligator (13; 8; 5) NEUTRAL BUY NEUTRAL

USD/CHF 1 day

Outlook

1 week

Outlook

1 month

Outlook MACD (12; 26; 9) SELL SELL BUY

RSI (13) NEUTRAL NEUTRAL NEUTRAL

Stochastic (5; 3; 3) BUY NEUTRAL SELL

ADX (13) NEUTRAL NEUTRAL NEUTRAL

CCI (13) NEUTRAL NEUTRAL NEUTRAL

SAR (0.02; 0.2) SELL SELL BUY

AROON (14) NEUTRAL SELL SELL

Alligator (13; 8; 5) SELL NEUTRAL NEUTRAL

EUR/JPY 1 day

Outlook

1 week

Outlook

1 month

Outlook MACD (12; 26; 9) SELL BUY BUY

RSI (13) NEUTRAL BUY NEUTRAL

Stochastic (5; 3; 3) NEUTRAL SELL NEUTRAL

ADX (13) NEUTRAL BUY SELL

CCI (13) NEUTRAL BUY NEUTRAL

SAR (0.02; 0.2) BUY BUY SELL

AROON (14) NEUTRAL BUY NEUTRAL

Alligator (13; 8; 5) NEUTRAL BUY NEUTRAL

TRADING SIGNALS

Friday, March 23, 2012 08:00 GMT

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

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. Lines Resistance 1, 2, 3 – a resistance level calculated with the help of the standard Pivot method; Pivot – a point calculated on the basis of High, Low and Close prices of the preceding period; Support 1, 2, 3 – a support level calculated with the help of the standard Pivot method.

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.

Chart notations

■ Monthly resistance ■ Weekly resistance ■ Daily resistance ■ Daily support ■ Weekly support ■ Monthly support

Max – the highest projection set by the industry sentiment

Mean – the average price based on the projections of the industry sentiment

Min – the lowest projection set by the industry sentiment

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

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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