- SWFX market sentiment is 58% bullish
- 53% of pending orders in the 100-pip range are to SELL the Euro
- Upcoming fundamental events: US Advance GDP q/q, Advance GDP Price Index q/q, Revised UoM Consumer Sentiment
Downside potential is still apparent for EUR/USD in this session.
The European single currency weakened against the Greenback, following the European Main Refinancing Rate data release. The EUR/USD currency pair lost eight pips, or 0.07%, to continue fluctuating in the 1.1715 area.
The European Central Bank released Main Refinancing Rates that came in line with expectation of 0.0%, and stayed unchanged for the last periods.
Mario Draghi, president at ECB (European Central Bank) said: "While uncertainties, notably related to the global trade environment, remain prominent, the information available since our last monetary policy meeting indicates that the euro area economy is proceeding along a solid and broad-based growth path".
US GDP
The only significant data release in this session is the US Advance Gross Domestic Product for the second quarter published by the Bureau of Economic Analysis at 1230GMT. The market expects a 4.2% gain on the US economy during the given period of time. The Advance GDP Price Index is published at the same time.
The University of Michigan will publish the revised consumer sentiment for July at 1400GMT.
EUR/USD expected to fall
The Euro lost 95 pips against the US Dollar on Thursday. The pair started falling considerably following a breakout from the 55-, 100– and 200-hour SMAs around the 1.17 mark. This fall stopped suddenly near 1.1640 around which the Euro was fluctuating on Friday morning, as well.This plunge has sent technical indicators in the oversold territory on the 1H time-frame. However, there is still apparent some downside potential on the 4H chart that could result in bears gaining control in the market once again and testing the senior triangle line and the weekly S1 at 1.1615.
In terms of resistance, it is unlikely that the rate gains enough bullish momentum to dash through the 1.1680 territory which is limited by the weekly PP and the 55-, 100– and 200-period SMAs on both the 1H and 4H charts.
Hourly Chart
The massive decline which started mid-April was stopped by the bottom boundary of the senior channel a strong support level near 1.1550.
The pair has since been moving along this line, restricted by the 38.20% Fibonacci retracement line and the 55-day SMA. The latter was breached this week, pointing to further advance within the following weeks. A strong resistance cluster to watch out for is the 100- and 200-day SMAs near 1.20.
Daily Chart
Euro is stronger today
EUR/USD remains strongly bullish with 58% of open positions being long today. This sentiment has been fluctuating around the 60% mark for a couple of weeks now, demonstrating that traders are still expecting the Euro to strengthen against the Greenback in the medium and long term.
The outlook for the two currencies against the rest of the traded financial instruments is as follows: the Euro is 55% bullish and the US Dollar is 59% bearish. If looking at these readings during the previous two weeks, it is apparent that Euro bulls are gradually weakening.
OANDA traders are strongly bullish with 57% of open positions being long today (+6%). This is a considerable increase from 51% in the previous session, as institutional investors are once again bullish on the Euro. Saxo Bank clients are now bullish, as 51% of their positions are long.
Spreads (avg, pip) / Trading volume / Volatility