Daily Forex & PM Market Sentiment (2015.08.13)

Time of the market sentiment analysis – 0500 GMT.

1.FOREX

By the beginning of the trading day of August 13, 2015  the technical picture in the FOREX market looked as follows:

according to the market participants’ power balance chart, at the moment the Forex Majors segment is dominated by neurtal sentiment. This can be seen from the general distribution of forces (the first column on the left):

2015AUG13 Forex Majors Market Sentiment

Forex Market Sentiment

 

 

 

 

 

 

 

 

  • the non USD bulls share stands at 33.3% level
  • the share of neutral market participants stands at 38.1% level
  • the non USD bears share stands at 28.6% level

As for the long-term trends, the balance of power here indicates that the market is dominated by bearish sentiment. At the moment, slightly more than half of market participants have joined the bears’ camp (57%), one third of market players are in the category of observers (33%), the positions of bulls are insignificant (10%).

In the medium term, the market is dominated by neutral sentiment. Here, slightly less than half of market players are in the category of observers (about 48%), the positions of bears stand at 29% level, the positions of bulls are close to 24% level.

On the short time intervals the market is dominated by bullish sentiment. Currently, in complete absence of bears, two-thirds of the market is under control of bulls (67%), while the rest share of the market belongs to neutral market participants (33%).

From the technical point of view, the US dollar index continues to consolidate in a price range of 93.00 – 98.00, which was formed after a long-term uptrend. During yesteray’s trading the US dollar index demonstrated strong bearish price dynamics, which was accompanied by very high level of volume. By the end of the day the US dollar index fell by 1.07% to reach session low at 95.94 level. As a result, a bearish candle with a big-sized body and short shadows was formed on a daily chart. Closing the day below the key support level 96.50 resulted in the completion of  “double top” reversal pattern. Thus the minimum target of anticipated downward movement is at 94.50 level.

USD Index

USD Index Mid-term Technical Picture

 

 

 

 

 

 

 

Judging by the sum of signals of three trading strategies that we use, at the moment the share of bulls in the USD Index stands at 0%, the share of neutral market participants equals 56%, the share of bears is 44%. Today we expect the continuation of bearish price dynamics in the USD index. In our opinion, today it is better looking for opportunutuies to sell the USD against other major currencies with a good P/L ratio.

Today the AUD and JPY seem to be the weakest currencies against the US dollar (first column on the right). On the other hand, the GBP today looks quite strong against the US dollar.

As for the cross rates, here we would like to draw your attention to the fact that today the EUR is quite strong against most major currencies. Judging by the sum of signals of three trading strategies that we use, at the moment the share of bulls in the EUR has reached 63.5% level. In this regard, today, we recommend looking for opportunities to buy the EUR against other major currencies with a good P/L ratio. Turning to the balance of power chart for EUR cross rates, we will see the following picture:

2015AUG13 EUR Crosses Market Sentiment

Forex Market Sentiment

 

 

 

 

 

 

 

 

Among the most important events and economic reports published or scheduled for publication today, first of all it is worth noting the regular meeting of the ECB, which will probably result in no major decisions on current monetary policy.

The statistical report on retail sales  and the traditional report on the number of applications for unemployment benefits in the US can rightly be considered  as main event today. According to the economists’ forecasts, in July, retail sales growth is expected at 0.7% level, after declining 0.3% in June. On the other hand, the applications for jobless benefits are at historic lows and further decline here will be a good sign of more healthy labor market.

Among the most important events that occurred in the market yesterday, first of all it is worth noting the publication of a statistical report on the state of labor market in the UK. According to the report released by ONS, the number of unemployed people in the country during the second quarter increased by 25k. The unemployment rate  remained at 5.6% level and was in line with expectations.

Another macroeconomic indicator, which reflects any short-term changes in the labor market of Great Britain, showed that applications for unemployment benefits unexpectedly fell in July by 4900, while the last month’s reading was revised upward. As for the indicator of inflationary pressure in wages, where the Bank of England pays special attention to, those figures were slightly worse than expectations and its past values (2.4% vs. 2.8% and 3.2%).

2.Precious Metals

Please find Bulls and Bears Power Balance Chart for Precious Metals Market below:

2015AUG13 Precious Metals Market Sentiment

Precious Metals Market Sentiment