- SWFX market sentiment is 53% bearish
- Trader pending orders are 55% to sell
- Pair opened Monday's session at 1.0674
- Upcoming Events: ECB President's Mario Draghi's speech
As markets expected, the European Central Bank left its monetary policy unchanged at its meeting on Thursday, saying it would continue monitoring inflation. Regarding non-standard monetary policy measures, the Governing Council confirmed that the monthly asset purchases of 80 billion euros would be reduced to 60 billion euros starting from next month. Policymakers also voted to keep the main refinancing rate at 0% and the overnight deposit rate at -0.4%. The ECB said that its key interest rates would likely remain at present or lower levels for an extended period of time, and well past the horizon of our net asset purchases. After two years of the ECB's QE programme inflation accelerated well above the Bank's initial goal, signaling that the monetary stimulus should be reduced.
However, the ECB President Mario Draghi pointed out that the recent acceleration in prices was mainly driven by a rebound in energy prices. Draghi also highlighted that risks related to the upcoming European elections had the potential of slowing the economic recovery in the region. Nevertheless, the ECB raised its 2017 inflation projection to 1.7% from 1.3% in December, adding that the expected pick-up would probably be temporary. Meanwhile, GDP growth projections were revised up to 1.8% from 1.7% in December
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Upcoming events: Mario Draghi
There is only one event scheduled to occur during Monday's trading session, and it is most likely to affect all of the markets on a larger scale than any macroeconomic data release. The event will be the speech of Mario Draghi, the president of the European Central Bank. He is set to start speaking at 13:30 GMT, as he outlines the future of the Euro Zone's monetary policy.
Read More: Fundamental Analysis
EUR/USD surges above 1.07 mark
Daily Chart: Due to comments from the president of the European Central Bank, Mario Draghi, the common European currency jumped against the US Dollar in the recent trading sessions. The currency exchange rate already reached the new second weekly resistance level at 1.0718. The last time the rate was at such level was on February 6. As Mario Draghi is set to speak also on Monday, it is likely that the Euro would continue the surge. In such case the weekly S2 would be broken, and the rate would surge up to the monthly R1, which is located at 1.0772 level.Daily chart
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Hourly chart: The hourly chart shows a rather complicated situation. However, it can be seen that the short term ascending channels of the hourly chart have lead the currency exchange rate to the upper trend line of the long term descending channel. Due to that factor, it is quite possible that the currency pair will consolidate down to the support cluster located from 1.0640 to 1.0630 level. Afterwards the rate will set its direction in accordance with the fundamental information, which will come from Mario Draghi.
Hourly chart
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Read More: Technical Analysis
Markets become bearish
SWFX traders have become bearish regarding the pair, as 53% of open positions are short on Monday. Meanwhile, 55% of trader set up orders are set to sell the Euro.
OANDA traders have become bearish, as 55.37% of trader open positions are short on Monday, compared to 51.89% long positions previously. In addition, SAXO bank clients are on the bearish side, as 58.68% of open positions are short, compared to 52.79% on Friday.
Spreads (avg,pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.06 in April
Traders, who were questioned on their longer-term views on EUR/USD between February 13 and March 13 expect, on average, the currency pair to trade around 1.06 by the start of April. In general, 55% of participants believe the exchange rate will be generally above 1.06 in ninety days, and 12% (-2%) see it above 1.12. In the meantime, 21% of those surveyed reckon the pair will be at parity or below. © Dukascopy Bank SA