- SWFX market sentiment is 54% bearish
- Trader pending orders are 57% to sell
- Pair opened Monday's session at 1.0722
- Upcoming Events: US Core PCE Price Index; US Personal Spending; US Pending Home Sales; German Retail Sales; ECB President Draghi Speaks; German Unemployment Claims
Sales of new homes in the Unites States dropped to a 10-month low last month, official figures revealed on Thursday. According to the Commerce Department, home sales fell 10.4% to a seasonally adjusted annual pace of 536,000 units in December, whereas the November reading was revised up to 598,000 from the originally reported 592,000 unit-pace. Market analysts anticipated a slight decrease to 585,000 units during the reported period. The December figure marked the first monthly decline in the last three months. On an annual basis, sales were down 0.4% compare to December 2015. For all of 2016, new home sales grew 12.2% to 563,000 units, the highest level since 2007. Nevertheless, a severe lack of houses for sale continue to challenge the market.
Earlier this week, the NAR said that the supply of preowned houses on the market fell to a 17-month low last month. Analysts say that the rise in mortgage rate is unlikely to have a major impact on the housing market. However, forecasts suggest further increases if the Federal Reserve keeps its promise to raise interest rates at least three times in 2017. Separately, the Labor Department reported initial jobless claims rose to 259,000 in the week ending January 20, following the preceding week's 237,000 filings and surpassing analysts' expectations for an increase to 247,000.
Upcoming events: Various data releases with ECB on the top
There are set to be released loads of data with medium impact during the next 24 hours. Such data releases should be watched, but their impact usually is not big enough for volatility traders to make profit. At 13:30 GMT the US Core Price Index and the US Personal Spending will be published. Afterwards, at 15:00 GMT the US Pending Home Sales data will be out. That will be all for Monday. However, on early Tuesday morning Europeans are set to begin their work at sunrise. At 7:00 GMT the German Retail Sales data will be published. At 8:00 GMT ECB President Mario Draghi will give a speech, and at 8:55 GMT the Germans will publish their Unemployment Claims number.
EUR/USD opens above 1.07
Daily Chart: With the start of a new week, on Monday, the common European currency began the day's trading session a lot higher than the previous close against the US Dollar. The reason for that are the signed policies and actions taken by US president Donald Trump during the weekend. However, the pair slightly retreated during the first trading hours. Afterwards, it met with the weekly PP at 1.0709, which provided support to the pair. Due to this factor it is most likely that the currency exchange rate will surge up to the first weekly resistance level, which is located at 1.0761.Daily chart
Hourly chart: The hourly chart reveals that the currency exchange rate is actually in the process of breaking through the weekly PP and the various support levels, which strengthen it on the hourly chart. Among those are the 55 and 200-hour SMAs near 1.07 mark. If the rate pushes through the support mark, it can fall as low as 1.0644, as there is only the lower Bollinge band at 1.0677, which might hinder the fall of the Euro in such case.
Hourly chart
SWFX traders less bearish
SWFX traders have slightly decreased their bearish outlook, as 54% of trader set up orders are short on Monday, compared to 56% on Friday. In the meantime, 57% of trader set up orders are to sell the Euro.
OANDA traders remain bearish outlook, regarding the pair, as 54.22% of open EUR/USD positions were short on Monday. Meanwhile, SAXO bank traders also remain bearish, as 62.95% of open positions were short, compared to 61.22% previously.