- SWFX market sentiment is 51% bullish
- 54% of pending orders in 100-pip range are set to BUY
- 50% of traders remain bullish on the Dollar
- Upcoming Events: US ADP Non-Farm Employment Change, ISM Non-Manufacturing PMI, ECB Draghi speech, Fed Yellen speech
Yesterday's trading session revealed that a breakthrough the 100% Fibonacci retracement level at 1.1715 was a false signal. In reality, the pair made a quick turnaround and resumed the surge, breaking through the multiple moving averages and leaving a senior descending channel.
The Greenback sustained Monday's gains against the Euro, as ISM manufacturing data showed better-than-expected figures. The US Dollar rose slightly against the European single currency by 7 base points to keep its stronger position, with the pair falling further below the 1.1720 level this morning.
The ISM stated that its index for the US manufacturing activity surged to 60.8 points in September, reaching the highest level in more than 10 years. Solid advances in ISM-reported figures to a certain extent reflected affects from Hurricanes. The report also showed an increase in its exports measure as producers benefited from the Dollar's weakness, which made US supplies more attractive to overseas buyers.
Yellen & Draghi speak
Today is expected to be the most intensive day of the week, as at 12:15 GMT the Automatic Data Processing Inc. will publish an update on the US employment change, then at 14:00 GMT the Institute for Supply Management will reveal information about the US non-manufacturing activity. Later, at 17:15 GMT Mario Draghi will deliver a speech in Frankfurt, while two hours later Janet Yellen will do approximately the same in St. Louis.
EUR/USD recovers and breaks descending channel
It appeared that a breakthrough the 100% Fibonacci retracement level at 1.1715 and the weekly S1 at 1.1710 had a short-term effect. Despite the average market sentiment, which is 61% bearish, the pair managed to restore not only lost positions but also cross a combination of 55- and 100-hour SMAs as well as the upper trend-line of a medium-term descending channel. On the one hand, the further climb to the top is likely to be hindered by the slipping 200-hour SMA near 1.1810. On the other hand, the above retracement level is also not expected to let the rate to drop to the bottom. For this reason, a great impact on the further direction of the pair will have all fundamental events that are scheduled for today, including Draghi and Yellen speeches.
Hourly Chart
Although yesterday there was an impression that the pair crossed the 100% Fibonacci retracement level, now it is evident that it made an ordinary rebound from it. Such ultimate outcome suggests that the Euro might continue to appreciate against the Dollar in the medium-term. On the other hand, the above fundamental events that are planned for today might cause volatility strong enough to push the rate back to the bottom.
Daily Chart
Traders become neutral
In result of the previous trading session the bullish market sentiment decreased by 1%, as 51% of open positions became long.
In the meantime, the outlook for the two currencies against the rest of the traded financial instruments is the following: Euro is 55% bearish, while for the Dollar 50% bullish.
Traders of OANDA remain bearish, as 62% (-3%) of open positions are short. Meanwhile, SAXO are also bearish on this currency pair with 57% (+2%) of open short positions.
Spreads (avg, pip) / Trading volume / Volatility