- SWFX market sentiment is 58% bearish
- 54% of pending orders in 100-pip range are set to SELL
- 54% of traders are bullish on the Dollar
- Upcoming Events: US Core CPI and Core Retail Sales
In result of the previous trading session the currency pair made a successful breakout from a one-week long rising wedge pattern. From trade patterns theory perspective, today the Dollar has to continue to gain value against the Euro. However, whether the pair will keep moving in the southern direction will heavily depend on release of information on the US CPI and Retail Sales.
The Euro fell slightly against its American counterpart, reflecting anticipated increase in the US producer prices. The EUR/USD currency pair edged 10 base points lower to the 1.1844 mark to continue temporary depreciation, though the pair passed across the 1.1850 area again on Friday morning.
The Labour Department revealed that the US Producer Price Index climbed 0.4% in September. Data suggested the growth fuelled by higher gasoline prices, as they marked the strongest rise in two years due to production disruptions in Texas oil refineries caused by Hurricane Harvey. Moreover, the gain is set to bolster the Fed's case for the next rate hike this year despite sluggish inflation readings.
US inflation in focus
Today will be a very important data release, which will have important implications on the Fed decision about the need of another interest rate hike in December. So, at 12:30 GMT the Bureau of Labor Statistics and Census Bureau will simultaneously release on information about the US Consumer Price Index and Retail Sales. A combination of those indicators is expected to cause notable volatility in the markets.
EUR/USD breaks from rising wedge
After surging for more than a week in a minor rising wedge pattern, the currency rate made an expected breakout near the monthly PP 1.1875. The turnaround was additionally supported by decreasing number of unemployment claims and release of better than expected US Core PPI. Despite this favourable fundamental background the pair failed to break below the 1.1830 mark due to support set up by the 55-hour SMA. Moreover, an area near the 1.1810 level is additionally secured by the weekly R1 and the 100-hour SMA. From this perspective, the pair is not expected to slip to the bottom in the first half of the day. There are similar expectations for the northern side, which is obstructed by the above monthly PP. Therefore, further direction of the rate will heavily depend on release of information on the US inflation and retail sales.
Hourly Chart
For the first time in a week the currency pair ended trading session in a red zone, failing to pass through the monthly PP at 1.1875. As the rate made a breakout from a rising wedge pattern, further surge seems unlikely. However, a release of better than expected US fundamental data later this day might elevate the pair closer to the upper boundary of a senior descending channel.
Daily Chart
Traders become neutral
In result of the previous trading session the bearish market sentiment remained unchanged, as 58% of open positions are short now.
In the meantime, the outlook for the two currencies against the rest of the traded financial instruments is the following: the Euro is 62% bearish and the Dollar is 54% bullish.
Traders of OANDA remain bearish, as 63% (+1%) of open positions are short. Meanwhile, SAXO are also bearish on this currency pair with 61% (-2%) of open short positions.
Spreads (avg, pip) / Trading volume / Volatility