- SWFX market sentiment is neutral
- Pending commands in the 100-pip range 63% short
- Pair opened Monday's session at the 1.0994 level
- Aggregate daily technical indicators bet EUR/USD will depreciate
- Economic events to watch over the next 24 hours: S&P/CS 20-City HPI; US PMI Services; US Consumer Confidence; US New Home Sales
As markets expected, the European Central Bank (ECB) kept its key interest rates on hold on Thursday, but signaled that it is prepared to add more monetary stimulus later in the year. The main refinancing rate was left at 0%, whereas the ECB interest rates on the deposit facility and the marginal lending facility remained unchanged at -0.40% and 0.25%, respectively. The central bank slashed its deposit rate deeper into negative territory in March. In a news conference, Mr. Draghi said the Brexit vote had added to "headwinds" for the Euro zone economy, that include broader geopolitical uncertainty. Mario Draghi, President of the European Central Bank, also confirmed that the monthly asset purchases of 80 billion euros may run beyond the current deadline of March 2017, if necessary. Furthermore, the central bank's President highlighted that the governing council may provide more stimulus at its next meeting in September, as new post-Brexit forecasts for economic growth and inflation will be available by that time. Meanwhile, analysts polled by Reuters slashed their growth forecast for the Euro zone to 1.3% from 1.6%, but left inflation projections unchanged at 1.3%
Euro zone and European Union consumer confidence fell markedly in July, the European Commission reported releasing its monthly indicator, in a new sign of weaker morale after the 23 June British vote to leave the European Union. The European Commission's flash estimate showed that the mood of shoppers in the currency bloc decreased by 0.7 points to minus 7.9 in July from an upwardly revised minus 7.2 in June. That was lower than the minus 7.3 points estimated by markets. The marked drop in July follows a slight fall in June and two consecutive rises in April and May. Meanwhile, the figures for the European Union as a whole showed a much worse drop of 1.8 points to -7.6, a level not seen in two years. The indicator for the bloc as a whole is now below the Euro zone indicator for the first time in years. A lot of economists believe that if this trend continues, the decline in confidence threatens to weaken the bloc's already modest economic recovery. Propelled by a gradual decline in unemployment and lower energy prices, growth has been driven by rising consumer spending over recent quarters, while demand for exports has been slowing.
Upcoming fundamentals: Various US data and a quiet EU
On Tuesday, data affecting the EUR/USD pair will come from the US, as various data releases are set for today. First of all the S&P/CS 20-City HPI index for May is set to be published at 13:00 GMT. Afterwards, at 13:45 GMT US PMI Services for July will be released. Later on in the day the most important data about the US economy will come at 14:00 GMT, as US Consumer Confidence index for July and New Home Sales for June will be published.
EUR/USD moves to 1.10 on Monday
Daily chart: The Euro recouped its Friday's losses against the US Dollar on Monday, as the currency exchange rate moved from the newly set low level of 1.0971 to 1.0995 by the end of Monday's trading session. On Tuesday morning, the pair was more volatile to the downside, as it touched 1.0983 level. However, the EUR/USD pair started surging by 4:45 GMT, as the exchange rate was at 1.10 at that time. In the meantime, daily aggregate technical indicators forecast once again a downfall of the pair.Daily chart
Hourly chart: The hourly chart shows that the common European currency appreciated steadily against the Greenback since Monday morning. The currency exchange rate was only hindered twice, as it bounced off the upper Bollinger band at 1.0995 around 9:00 GMT, and the rate struggled against the resistance put up by the 55-hour SMA from 18:00 to 4:00 GMT from Monday to Tuesday. However, the pair broke through the SMA and moved to the weekly PP at 1.1005 by 5:00 GMT.
Hourly chart
SWFX sentiment is neutral on Tuesday
OANDA trader bearish sentiment has increased compared to Monday's 50.78%, as, at the moment, 51.54% of OANDA open positions are short. In addition, SAXO Bank clients have increased their bearish stance, as their open short positions are now at 54.07% compared to 50.51% of last trading session.