- SWFX market sentiment is 52% bearish
- Trader pending orders are 66% to sell
- Pair opened Wednesday's session at 1.0683
- Upcoming Events: US Unemployment Claims
The US trade deficit dropped more than expected in December after two straight months of increases amid higher exports. The Commerce Department reported the country's trade gap narrowed 3.2% to $44.3 billion in the reported month, following November's upwardly revised deficit of 45.7 billion, while market analysts held expectations for a decrease to $45.0 billion. The December improvement was driven by stronger exports that posted a 2.7% monthly increase to $190.7 billion, the highest level since April 2015. Advanced technology goods were the main contributor to export growth. However, US exports remained under pressure from the strong Dollar, which rose 4.4% against other major currencies in 2016. The data showed shipments to the EU climbed 10.1%, with exports to Germany advancing 12.4%.
The US President Donald Trump accused the EU's largest economy of using the weak Euro to exploit the US. Meanwhile, imports of goods and services jumped 1.5% to $235.0 billion in December, the highest since March 2015. The key drivers of import growth were attributable to higher oil prices and stronger domestic demand. Separately, the JOLTS monthly report released on Tuesday showed job opening in the US totaled 5.50 million in December, slightly down from November's revised 5.51 million and below a 5.56 million market forecast.
Upcoming events: US Unemployment Claims
The next 24 hours will be quiet for the financial markets with a few exceptions. The central banks of New Zealand and Australia are about to release information and give speeches. However, that information is not directly going to influence EUR/USD pair. The markets in general will be more moved by the US Unemployment Claims on Thursday at 13:30 GMT. That data release will be covered by the Dukascopy Research team live on the webinar, which will available for access by clicking on the notification on the trading platform.
EUR/USD fall pauses
Daily Chart: The common European currency's fall against the US Dollar was paused in the first hours of Wednesday's trading session, as the currency exchange rate made more attempts to pass the support cluster located below it. The support cluster consists of the weekly S1 at 1.0659 and the monthly PP at 1.0850. It is most likely that the support cluster will be passed, and the currency exchange rate will continue to move lower to the next support level, as the 55-day SMA is located at 1.0621.Daily chart
Hourly chart: The hourly chart shows that there are no hourly support levels, which could hinder the fall of the Euro, as even the lower Bollinger band is being bent lower while lagging behind the currency exchange rate.
Hourly chart
Bearish sentiment persists
SWFX traders have not changed their open positions, as 52% of traders remain bearish on the pair. In the meantime, 66% of trader setup orders are set up to sell the Euro.
OANDA traders remain almost neutral, regarding the pair, as 51.06% of open EUR/USD positions were short on Wednesday. Meanwhile, SAXO bank traders have increased their bearish outlook, as 56.03% of open positions are short, compared to 54.67% previously.