- SWFX market sentiment is 59% bearish
- Trader pending orders 51% bullish
- Pair opened Wednesday's session at 1.1348
- Upcoming Events: US Factory Orders; FOMC Meeting Minutes
On Wednesday morning the common European currency remained above the support of the weekly pivot point against the US Dollar, as markets were expecting fundamental news. Although most market participants were staying dormant in expectations of the FOMC Meeting Minutes, one could notice a very short term descending triangle forming on the smaller timeframe charts.
US manufacturing activity rose more than expected last month, official figures showed on Monday. The Institute for Supply Management reported its Purchasing Managers' Index for the manufacturing sector increased to 57.8 in June, up from 54.9 registered in the preceding month. That marked the strongest reading since August 2014, reflecting improvements in economic conditions both within the country and abroad.
FOMC Meeting Minutes
The main focus on Wednesday will be at the publication of the FOMC Meeting Minutes. To be exact, at 18:00 GMT the FOMC Meeting Minutes will be published. That is set to be the main focus of the day. Meanwhile, before that, at 14:00 GMT, the US Factory Orders data will be out.
EUR/USD reveals short term pattern
After a more thorough analysis a short term descending channel was discovered on the hourly chart for the EUR/USD currency pair. In accordance with the pattern the rate should pass the support of the weekly and monthly PP at 1.1348 and 1.1331. However, the currency exchange rate is set to have additional support from the 200-hour SMA, which on Wednesday morning was located at the 1.1320 mark. Meanwhile, as it was expected on Tuesday, the 55-hour SMA has begun to provide resistance to the currency pair near the 1.1370 mark. It is highly likely that the pair will find support in the pivot point at 1.1348 while making attempts to break the resistance of the 55-hour SMA. As a result a small scale descending triangle might form, the breakout of which will reveal the short term direction of the pair.
Hourly Chart
In regards to the daily chart, there are additional comments that have to be made. First of all the upper Bollinger band has moved up to the 1.1450 level, and it is likely going to continue to free up the range for a surge. Meanwhile, the 20-day SMA has joined the weekly S1 in providing support at the 1.1251 mark.
Daily Chart
Bearish sentiment persists
SWFX traders remain bearish, as 59% of open positions are short. Meanwhile, 51% of trader set up orders are to buy the Euro, as the markets are expecting the FOMC news.
Traders of OANDA have continued to decrease their bearish position proportion, as 67.50% of open positions are short on Wednesday, compared to 69.74% previously. SAXO bank clients have gone in the opposite direction, as 66.57% of open positions are short, compared to 65.31% on Tuesday.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast shows EUR/USD will trade above 1.12 by October
Traders, who were questioned on their longer-term views on EUR/USD between June 5 and July 5, expect, on average, that the currency exchange rate may trade above 1.12 during the first week of October. In general, 64% (-2%) of participants believe the exchange rate will be above 1.12 in the following ninety days. Meanwhile, 31% (+1%) of respondents expect to see the rate below 1.10.