- SWFX market sentiment is 59% bearish
- Trader pending orders 57% bullish
- Pair opened Wednesday's session at 1.1469
- Upcoming Events: Fed Chair Yellen Testifies
The Euro broke out of the triangle against the US Dollar. However, it did not plummet, as it was forecasted. Instead the bulls have gained profit, as the EUR/USD currency exchange rate has touched the 1.1490 mark, and the rate is most likely going to score additional gains.
New orders for US-made goods declined more than estimated for the second consecutive month in May, a worrisome sign for the manufacturing industry. The US Commerce Department reported on Wednesday that the country's factory orders dropped 0.8% month-over-month in May, following a downwardly revised 0.3% fall registered in April. Meanwhile, analysts anticipated new orders to show a smaller decline of 0.5%. On a yearly basis, factory orders were up 4.8%, suggesting that US manufacturing activity continued to expand at a moderate pace.
Janet Yellen testifies
An out of the ordinary event is set to occur on Wednesday. The chairwoman of the Federal Reserve Janet Yellen is set to speak publicly. To be precise, the chair is set to testify at 14:00 GMT before the House Financial Services Committee in Washington DC. The text of the speech is usually published at the start of the testimony, and it does not cause a lot of volatility. However, the questions of the committee are the ones, which might influence the financial markets through the US Dollar.
EUR/USD breaks out of triangle
The breakout out of the descending triangle pattern did not occur to the downside. Instead the EUR/USD currency exchange rate has jumped. The currency pair signalled that it will move to the upside, as it slowly moved out of the triangle and fluctuated below the 55-hour SMA. Afterwards, the Euro appreciated sharply against the US Dollar until the pair reached the 1.1490 mark. Due to the fact that during the just described move the pair broke the first weekly resistance, which is located at the 1.1458 mark, the rate is set for additional gains. The next resistance, which is going to be targeted, will be the second weekly resistance level at the 1.1513 level. However, the 1.15 mark might prove itself as a psychological level.
Hourly Chart
If the marking of the daily chart are to be believed, the currency exchange rate will reach for the 1.1550 mark in the next few weeks. It is set to be squeezed in by the resistance of the more minor patterns until it reaches the most dominant pattern. The upper trend line of the massive scale descending channel is almost horizontally located just above the monthly R1 at the 1.1542 level.
Daily Chart
Bearish sentiment persists
The situation in the SWFX markets remains almost unchanged, as traders remain bearish with 59% of open positions being short. Meanwhile, 57% of trader set up orders are to buy the Euro.
Traders of OANDA are bearish, as 68.98% of open positions are short. Meanwhile, SAXO bank clients also remain at the bearish front, as 63.92% of their trader open EUR/USD positions are short.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast shows EUR/USD will trade above 1.13 in October
Traders, who were questioned on their longer-term views on EUR/USD between June 12 and July 12, expect, on average, that the currency exchange rate may trade above 1.13 during the second week of October. In general, 69% (+1%) of participants believe the exchange rate will be above 1.12 in the following ninety days. Meanwhile, 27% (+1%) of respondents expect to see the rate below 1.10.