- SWFX market sentiment is 54% bearish
- 73% of pending orders in 100-pip range are set to SELL
- 51% of traders are bearish on the Dollar
- Upcoming Events: US ADP Non-Farm Employment Change, ISM Manufacturing PMI, FOMC Statement and Federal Funds Rate
Despite a release of better than expected American data, the pair continued to move horizontally between the 100- and 55-hour SMAs. Such steady fluctuations are expected to last until the end of the FOMC meeting with subsequent announcement of the Federal Funds Rate. Yesterday's week reaction suggests that traders might not to pay enough attention to the employment data release.
The EZ GDP report failed to change the side move in the EUR/USD currency pair on Thursday. After the release, the Euro added 1 pip against the US Dollar to reveal bulls' attempts to get back the strong footing for the currency, but the pair returned to 1.1630 on Wednesday.
The Eurostat release showed that the Euro zone's quarterly GDP growth was slightly weaker at 0.6% in the September quarter. However, the yearly GDP growth rate edged higher to 2.5% in the Q3. Data also showed the bloc's unemployment rate dropped to its nine-year low in the observed period. The Euro zone's consumer inflation showed some signs of cooling, with the CPI at 1.4% in October, though analysts suggested it could reach 2% target in the next year.
FOMC Meeting
Today will be marked by three different events that are expected to lead to notable volatility in the markets. The least impact is expected to cause a release of the ISM Manufacturing PMI at 14:00 GMT. A more significant market reaction should cause a monthly update on the Non-Farm Employment Change prepared by the Automatic Data Processing. Finally, the key event of the day will be a release of the FOMC Statement, where investors are going to look for clues on Fed's future plans on its balance sheet. In addition to that, President Trump might also announce today new chief of the central bank.
EUR/USD moves horizontally in anticipation of FOMC meeting
Despite a release of various macroeconomic data yesterday, including the Euro Zone CPI and CB Consumer Confidence, the pair did not make any sharp moves and continued to move horizontally between the 100- and 55-hour SMAs. Such indifference nicely illustrates how traders are anticipating the upcoming FOMC Monetary Policy Statement and appointment of the new Fed Chair by President Trump. Given that yesterday's information appeared to be better than expected plus general consensus that today's meeting will not bring any unexpected news suggests that the pair is likely to continue moving horizontally between the 1.1658 and 1.1625 levels with a tendency to stick to the southern direction. A major breakout to the top also looks unlikely because that side contains multiple barriers, such as the monthly and weekly PP or the 100% retracement level and 200-hour SMA.
Hourly Chart
Due to anticipation of release of the FOMC Statement, the pair started to move horizontally, which was reflected on daily chart. Basically, this event is expected to strengthen the Greenback. This fundamental assumption is partially supported by the 100-day and the 23.6% retracement level, which are both located above the current market price. But from trade patterns perspective, the Euro is expected to gradually appreciate against the Dollar, trying to surge to the upper trend-line of a dominant channel down.
Daily Chart
Traders remain bearish
In result of the previous trading session the bearish market sentiment stayed unchanged, as 54% 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 60% bearish and the Dollar is 51% bearish.
Traders of OANDA remain bearish, as 63% (+2%) of open positions are short. Meanwhile, SAXO are neutrally bearish on this currency pair with 51% (-2%) of open short positions.
Spreads (avg, pip) / Trading volume / Volatility