- SWFX market sentiment is 58% bearish
- Trader pending orders 55% bullish
- Pair opened Thursday's session at 1.1412
- Upcoming Events: US PPI; US Unemployment Claims; Janet Yellen Testifies
The EUR/USD currency exchange rate is being dictated and thrown around by the fundamental events occurring in the markets. Namely, rhetoric from the Federal Reserve Chairwoman Jante Yellen is influencing the financial markets from the side of the US Dollar.
On Wednesday, the Chair of the US Federal Reserve Janet Yellen testified on the Semi-annual Monetary Policy Report before the House Financial Services Committee in Washington DC. In the prepared testimony, Yellen said that the country's economy was strong enough for the central bank to continue to increase interest rates and start winding down its massive balance sheet as soon as this year.
Janet Yellen testifies
The main event of Thursday will be the fact that Janet Yellen will continue to testify at 14:00 GMT. However, before that some traders might want to take advantage of the volatility caused by the data sets, which will be released at 12:30 GMT. Namely, the US PPI and Unemployment Claim data sets will be out. The data release will be covered by the Dukascopy Research team on the bank's live webinar platform.
EUR/USD falls back below 1.14
The forecast of a surge of the Euro against the US Dollar has not fulfilled itself, as the currency exchange rate traded even below the 1.14 mark on Thursday morning. The main reason for the initial decline and passing of the support levels during the second half of Wednesday's trading session was the testimony given by the chairwoman of the Federal Reserve Janet Yellen. The testimony signalled that there are more than one changes in US monetary policy upcoming, which will strengthen the US Dollar. Due to that reason the currency pair traded below the 1.14 mark. It was facing a strong support cluster, as the levels just below the 1.14 are full of various supports. These support levels are highly likely going to force the pair into a continuation of the surge.
Hourly Chart
The daily chart reveals that the uptrend still remains in force. The currency exchange rate has simply encountered the resistance of the upper trend line of a long term ascending channel. Most likely a decline is set to occur in the next few trading sessions, instead of the expected jump directly to the 1.15 mark. However, the fundamental events scheduled on Thursday could still make any of the patterns obsolete.
Daily Chart
Bearish sentiment persists
The situation in the SWFX markets remains almost unchanged, as traders remain bearish with 58% of open positions being short. Meanwhile, 55% of trader set up orders are to buy the Euro.
Traders of OANDA are bearish, as 66.10% of open positions are short. Meanwhile, SAXO bank clients also remain at the bearish front, as 61.34% of their trader open EUR/USD positions are short.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast shows EUR/USD will trade at 1.13 in October
Traders, who were questioned on their longer-term views on EUR/USD between June 13 and July 13, expect, on average, that the currency exchange rate may trade above 1.13 during the second week of October. In general, 67% (-2%) of participants believe the exchange rate will be above 1.12 in the following ninety days. Meanwhile, 30% (+3%) of respondents expect to see the rate below 1.10.