- Traders are bearish with 57% short positions
- 65% of pending orders in 100-pip range are to SELL the Euro
- Upside potential up to 1.2380
- Upcoming events: German Preliminary CPI m/m, US Core PCE Price Index m/m, US Personal Spending m/m, US Unemployment Claims, Chicago PMI, Revised UoM Consumer Sentiment
The 1.23 area should be watched carefully, as the bottom boundary of the senior channel is located there.
The Greenback strengthened against the Euro, following the US final gross domestic product data released on Wednesday. The EUR/USD currency pair lost only two pips, or 0.02%, in the first minute after the release, to continue fluctuating in the 1.2385 area.
The Bureau of Economic Analysis revealed higher final GDP in the Q4 2017, however the market remained almost unchanged. The Bureau of Economic Analysis reported a growthof 2.9%, surpassing the expectations and following a 3.2% growth rate recorded in the previous period. One of the main reasons for the US economy to expand more than forcast is the increase in consumer spending.
Fundamentals of intermediate importance
The economic calendar includes several fundamentals of intermediate importance in this session. First, Germany is set to release its preliminary CPI for the current month.
Second, the rest of data come from the United States. The Bureau of Economic Analysis will publish the Core PCE Price Index and the Personal Spending during February at 1230GMT. The weekly unemployment claims are also released at the same time. The Chicago PMI and the Revised UoM Consumer Sentiment are to be published at 1345GMT and 1400GMT, respectively.
EUR/USD bounces off 1.23
Wednesday's session was spent in a relatively calm manner for EUR/USD, as the rate remained fluctuating between the weekly R1, the 55– and 100-hour SMAs and a strong resistance/support level at 1.2385.The necessary momentum to breach the southern barrier was provided mid-session. Better-than-expected US GDP data put downward pressure on the pair as a result of which the Euro plunged 0.84% in a couple of hours. The 200-hour SMA and the weekly PP were likewise breached.
It is expected that the general tendency for the pair is northwards today, as supported by technical indicators. Bulls could find some resistance near the 1.2350 area, but it should eventually be breached to allow for a test of the daily high at 1.24. Meanwhile, a fall below 1.23 is unlikely.
Hourly Chart
EUR/JPY has been trading sideways since early March, as the strong support of the 55-day SMA has not allowed the pair to move below the 1.22 mark.
The Euro might still push slightly higher towards the weekly R1 and the upper boundary of the junior channel this week. However, the general direction should nevertheless remain south to eventually breach the senior channel and test the 100-day SMA and the monthly S1 at 1.2070.
Daily Chart
Sentiment strongly bearish
The number of short positions of EUR/USD has remained at 57%.
The outlook for the two currencies against the rest of the traded financial instruments is as follows: the Euro is 64% bearish and the US Dollar is 55% bullish.
The bearish sentiment of OANDA traders remains at 57% short positions today (-4%). Saxo Bank clients have likewise diminished their bearish sentiment to 59% short positions (-3%).
Spreads (avg, pip) / Trading volume / Volatility