- SWFX market sentiment is 64% bearish
- Trader pending orders 58% bullish
- Pair opened Thursday's session at 1.1443
- Upcoming Events: EU CPI Flash Estimate; EU Core CPI Flash Estimate; US Core PCE Price Index; US Personal Spending; US Chicago PMI; US Revised UoM Consumer Sentiment
On Friday morning the common European currency remained against the Greenback rather flat, compared to the closing price of Thursday. However, a short term ascending channel was drawn by Dukascopy analysts, which confirmed, that there just has been more than one consolidation, and the pair is still set to reach new heights.
Pending home sales in the United States dropped for the third consecutive month in May, official figures revealed on Wednesday. The National Association of Realtors reported that pending home sales fell 0.8% last month, following April's downwardly revised drop of 1.7% and falling behind market analysts' expectations for an increase of 0.9%. According to Wednesday's data, supply shortages mainly drove the fall. The supply of homes available for sale dropped more than 8% year-over-year in May.
Various minor releases
It can be observed on the economic calendar that on the last workday of the month various data sets will be dumped at various times. At 9:00 GMT the EU CPI Flash Estimate will be published, and it will influence the rate from the Euro side. The US data sets will begin pouring in in the second half of the day. At 12:30 GMT the US Core PCE Price Index and Personal Spending data will be out. Afterwards, at 13:45 GMT the Chicago PMI will be released. Last but not least the Revised UoM Consumer Sentiment will be published. It is highly unlikely that these data sets will cause fluctuations in the markets. However, in the cases of large discrepancies with the forecasts they have shown the strength to cause volatility.
EUR/USD reveals short term pattern
Due to the fact that the EUR/USD pair was not jumping in the free range up to the combined resistance of the monthly R2 at 1.1546 and the upper trend line of the massive scale descending channel pattern at 1.1550, a review of the short term situation was done. As a result of the review a rather weak short term ascending channel was discovered. In accordance with the pattern it is likely that that the 1.15 mark will be reached by the end of the day's trading session. In addition, the rate could be at the 1.1550 mark during the first half of next week. However, it could be observed during the late hours of Thursday's trading and early hours of Friday that the 1.1450 level was providing resistance in itself.
Hourly Chart
The daily chart shows that the surge is set to continue as far as the 1.1550 mark. At that level the upper trend line of the two and a half year downwards aimed channel pattern is located at. Coincidentally, at that level the second monthly resistance is located at. Meanwhile, the Bollinger bands are no longer viable for analysis, as they have been massively bent by the recent surge, and the pair is above the upper Bollinger band.
Daily Chart
Bearish sentiment persists
SWFX traders remain bearish, as 64% of open positions are short. Meanwhile, trader set up orders are clearly bullish, as 58% of pending commands are to buy the Euro.
Traders of OANDA have increased their bearish position proportion, as 73.72% of open positions are short on Friday, compared to 72.28% previously. In addition, SAXO bank clients are also bearish, as 69.72% of open positions are short, compared to 65.28% on Thursday.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast shows EUR/USD will trade above 1.12 in late September
Traders, who were questioned on their longer-term views on EUR/USD between May 30 and June 30, expect, on average, that the currency exchange rate may trade near 1.12 during the last week of September. In general, 62% of participants believe the exchange rate will be above 1.12 in the following ninety days. Meanwhile, 32% of respondents expect to see the rate below 1.10.