- SWFX market sentiment is 54% bearish
- 70% of pending orders in 100-pip range are set to SELL
- 50% of traders are bearish on the Dollar
- Upcoming Events: US Employment Cost Index, Chicago PMI, CB Consumer Confidence
Due to Paul Manafort and Rick Gates indictment the Dollar depreciated against the Euro and returned back to the 1.1658 mark. From larger perspective, this upward movement is expected to continue. However, in short run the pair is likely fail to pass to the top because of resistance formed by the weekly PP and the 100-hour SMA.
The US GDP data contributed to the temporary decline of EUR/USD on Friday. The Euro lost 0.11% against the Greenback, though the following report on the US consumer sentiment caused 33 base points gain, putting the pair to 1.1613, where it returned again by the session end.
The Commerce Department revealed that the US gross domestic product marked a 3.0% yearly growth pace in the third quarter, fuelled by higher business investment, while consumer spending growth eased slightly as incomes were hurt by hurricanes. Separate report showed that the US consumer sentiment remained at lofty levels over the course of October and was expected to improve further. Meanwhile, economists anticipate the Fed to raise rates one more time in December.
Consumer Confidence
In the early morning traders are advised to closely follow release of an update on the Euro Zone's inflation on year-on-year basis as well the GDP First Estimate. In second half of the day the Conference Board will publish Consumer Confidence Index, which is expected to increase from 119.8 to 121.1. At the same time, the valuable information will also contain release of the Employment Cost Index.
EUR/USD climbs to monthly S1 at 1.1658
In line with expectations, the Euro continued to successfully recover against the Dollar until it met the first line of defence set up by the monthly S1 at 1.1658. Nevertheless, a pressure from the 55-hour SMA is likely to provoke the pair to make another attempt to break to the top. On the one hand, a combined resistance formed by the weekly PP at 1.1674 and the 100-day SMA represent too strong barrier to be so easily crossed. On the other hand, the exchange rate two days ago made a rebound from the bottom edge of a senior descending channel. From this perspective, the pair is expected to climb upstairs for some while. An additional impulse might be provided after today's release of the Euro Zone's inflation data.
Hourly Chart
Although previous trading session the pair ended up in the green zone, it still failed to climb above the monthly S1 located at the 1.1658. From trade patterns perspective, the Euro is expected to gradually appreciate against the Dollar, trying to surge to the upper trend-line of a dominant channel down. However, the upcoming FOMC meeting most probably will lead to Greenback strengthening, which has a chance to even dissolute the above pattern.
Daily Chart
Traders remain bearish
In result of the previous trading session the bearish market sentiment slightly increased, as 54% of open positions are short now.
In the meantime, the outlook for the two currencies against the rest of the traded financial instruments is the following: the Euro is 62% bearish and the Dollar is 50% bearish.
Traders of OANDA remain bearish, as 61% (+2%) of open positions are short. Meanwhile, SAXO are neutrally bearish on this currency pair with 53% (+1%) of open short positions.
Spreads (avg, pip) / Trading volume / Volatility