- SWFX market sentiment is 52% bearish
- Trader pending orders are 57% to sell
- Pair opened Tuesday's session at 1.0750
- Upcoming Events: US Trade Balance; JOLTS Job Openings
Germany factory orders rose markedly in the last month of 2016, driven by a sharp increase in demand for investment goods, official figures revealed on Monday. According to the Economy Ministry, German industrial orders advanced at seasonally adjusted rate of 5.2% in December, following the preceding month's downwardly revised fall of 3.6% and surpassing market analysts' expectations for an increase of 0.6%. The December pace was the strongest since July 2014. On an annual basis, factory orders grew 8.1% in December. Monday's data provided evidence that economic growth accelerated in the final quarter of 2016 after climbing just 0.2% in the Q3 of 2016.
The Q4 2017 GDP data is scheduled to be released on February 2014. The majority of analysts suggest the economy expanded at a 0.5% pace during the Q4. However, their long-term forecasts are less optimistic in large due to the upcoming German federal elections. Yesterday's data also showed export orders climbed 10% month-over-month in December, driven by a 19.5% increase in demand for capital goods from the Euro zone. Meanwhile, domestic orders advanced 6.7% during the same period. On a quarterly basis, factory orders grew 4.3% in the Q4. After the release, the Euro extended its losses, falling to 1.0746 against the US Dollar.
Upcoming events: Minor US data
Two medium ranked data releases are set to be released during today's trading session. At 13:30 GMT US Trade Balance will be released and covered by the Dukascopy research team. In addition, at 15:00 GMT JOLTS Job Openings will be published.
EUR/USD below 1.07 mark
Daily Chart: During the early hours of Tuesday's trading session the common European currency fell below the 1.07 mark against the US Dollar, and there were no signs of the fall stopping. The currency exchange rate passed the 20-day SMA at 1.0695, which was the last support level before the 1.0659 level, where the weekly S1 is located at. Due to these factors combined it can be assumed that the pair will fall as low as the just mentioned support level by the end of Tuesday's trading. However, it is most likely that that support level will also stop the decline of the Euro.Daily chart
Hourly chart: While this analysis was being written, the Euro moved against the US Dollar as forecasted, by analyzing the daily chart. The hourly chart revealed that the fall was sharp and it took only four hours for the drop to occur. In addition, the rates fall was stopped by the weekly S1 at 1.0659. However, the additional support, provided by the monthly PP was not touched.
Hourly chart
Bearish sentiment persists
SWFX traders remain bearish regarding the pair, as 52% of trader open positions are short. In the meantime, 57% of trader set up orders are to sell the Euro.
OANDA traders have become almost neutral, regarding the pair, as 50.54% of open EUR/USD positions were short on Tuesday, compared to 55.19% on Monday. Meanwhile, SAXO bank traders have also decreased their bearish outlook, as 54.67% of open positions are short, compared to 63.15% previously.