- SWFX market sentiment is 62% bearish
- Trader pending orders are 54% to sell
- Pair opened Thursday's session at 1.0797
- Upcoming Events: US Unemployment Claims; Fed Chairwoman's Yellen's Speech; US New Homes Sales; FOMC Member's Kashkari's Speech; FOMC Member's Kaplan's Speech
Residential home sales plunged in February despite the promising start of the year. Contrary to experts' forecasts, total existing home sales slipped 3.7% over the month of February. Nevertheless, last month's results were still 5.4% higher than a year ago. According to the National Association of Realtors, the drop was mainly attributable to shortage of homes in the affordable price range. In February, the median house price soared 7.7%, which tags the 60th consecutive monthly increase. Realtors cannot satisfy the demand because more prosperous buyers quickly acquire newly listed houses and, thus, leave minimal choices to the remaining customers. Consequently, housing inventories went up 4.2% but still remained lower than a year ago.
The other data revealed that on the week ended March 17, US crude oil inventories surged 5.0M barrels, which significantly exceeds experts' forecasts. Moreover, the week highlighted the tenth increase in the last eleven weeks and presented a new record of 533.1M barrels.
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Upcoming events: US data and speeches
This Thursday is set to be a busy day in the USA, in regards to events, which are set to influence the US Dollar and subsequently all of the financial markets. First of all at 12:30 GMT the weekly Unemployment Claims will be released. However, the release will soon be offset by what Janet Yellen will say in her speech at 12:45 GMT. Later in the afternoon, at 14:00 GMT the US New Home Sales data will be out. Although, it is highly unlikely that this data release will impact the markets. At 16:30 GMT FOMC Member Kashkari will give a speech. Moreover, at 23:00 GMT another FOMC speaker will speak as Kaplan is set to talk with the public at that time.
Read More: Fundamental Analysis
EUR/USD remains below weekly resistance level
Daily Chart: On Thursday morning the common European currency against the Greenback remained below the combined resistance of the weekly R1 at 1.0814 level and the 38.20% Fibonacci retracement level at 1.0826. Although the resistance was holding, various clues were indicating that it will be broken sooner or later. In the case that unfolds, the currency exchange rate would surge to the next combined resistance cluster, which is located around the 1.0885 mark. The cluster consists of the weekly R2, 200-day SMA, the upper Bollinger band and an upper trend line of a medium term ascending channelDaily chart
© Dukascopy Bank SA
Hourly chart: The hourly chart shows that various hourly simple moving averages and the lower Bollinger band are moving upwards. These moving levels of significance are one of the main reason, why it is assumed that the currency exchange rate will surge. First of all there is the cluster of the 20 and 55-hour SMA near the 1.0995 level. Secondly the 100-day SMA, together with the lower Bollinger band, is just above the monthly R1, which is located at the 1.0772 level.
Hourly chart
© Dukascopy Bank SA
Read More: Technical Analysis
Markets remain bearish
Traders remain bearish as 62% of open positions are short on Thursday. Meanwhile, 54% of trader set up orders are to sell the Euro.
OANDA traders are also still bearish, as 60.56% of trader open positions are short on Thursday, compared to 62.71% positions previously. In addition, SAXO bank clients also remain on the bearish side, as 62.25% of open positions are short, compared to 65.48% on Wednesday.
Spreads (avg,pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.06 in April
Traders, who were questioned on their longer-term views on EUR/USD between February 23 and March 23 expect, on average, the currency pair to trade around 1.06 by the start of April. In general, 51% (-2%) of participants believe the exchange rate will be generally above 1.06 in ninety days, and 18% see it above 1.12. In the meantime, 17% (-2%) of those surveyed reckon the pair will be at parity or below. © Dukascopy Bank SA