- SWFX market sentiment is 60% bearish
- Trader pending orders are 56% to sell
- Pair opened Tuesday's session at 1.0738
- Upcoming Events: FOMC Member's Dudley's Speech; US Current Account
US industrial production was unchanged last month, while market analysts anticipated an increase, official figures revealed on Friday. The Federal Reserve reported factory production came in at 0.0% in February, falling behind analysts' expectations for a gain of 0.3%. Meanwhile, January's initially reported drop of 0.3% was revised to a 0.1% fall. However, manufacturing production, which accounts for 75% of overall industrial output, posted a 0.5% increase in February that matched the preceding month's rise. A global economic recovery, stronger business investment in equipment and appropriate inventory levels allowed manufacturers to gain momentum over the last several months.
The advance in manufacturing output was in line with analysts' forecasts. Data also showed utility output decreased 5.7%, following a 5.8% decline in January. The fall was mainly driven by unusually warm temperatures. Mining production rose 2.7% last month, boosted by oil and gas drilling. Business equipment output advanced 0.7% in February, compared to a 0.1% decline registered in the prior month, whereas production of construction supplies increased 1.3% after climbing 1.4% in January. Other data released on Friday showed mood of American shoppers jumped to 97.6 in March, according to the preliminary reading released by the University of Michigan.
Watch More: Dukascopy TV
Upcoming events: Minor US events
During Tuesday's trading session there are a few fundamental events set to take place, which might affect the financial markets. However, the possibility of the market being shaken during today's trading are quite low. The reason for that is that the only events are the FOMC Member's Dudley's Speech at 10:35 GMT and the US Current Account release at 12:30 GMT.
Read More: Fundamental Analysis
EUR/USD breaks resistance on Tuesday
Daily Chart: On Tuesday morning the common European currency surged against the US Dollar and managed to break through the resistance put up by the monthly R1, which is located at the 1.0772 level. The currency pair has set its course to the next resistance level, where it is likely to stop or even change direction. Above the rate there is a resistance cluster consisting of two notable levels of significance, as the weekly R1 is located at 1.0814, and the 38.20% Fibonacci retracement level is at the 1.0826 level. Moreover, the Fibonacci retracement level is strengthened by the upper Bollinger band, which is located at 1.0827.Daily chart
© Dukascopy Bank SA
Hourly chart: The hourly chart reveals that it was not the 20 and 55-hour SMA provided support, which propelled the rate higher. The rate began the surge only when it had already fallen to the 1.0720 level, where the combined support of the lower Bollinger band and the 100-hour SMA were located at. Most recently the rate has surged due to fundamental events in France, which can be observed on the technical charts as a bent in the upper Bollinger band.
Hourly chart
© Dukascopy Bank SA
Read More: Technical Analysis
Markets remain bearish
Traders remain bearish on the pair, as 60% of open positions are short, and 56% of trader set up orders are to sell the Euro.
OANDA traders are clearly bearish, as 59.85% of trader open positions are short on Tuesday, compared to 59.28% positions previously. In addition, SAXO bank clients also remain on the bearish side, as 61.84% of open positions are short, compared to 62.09% on Monday.
Spreads (avg,pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.06 in April
Traders, who were questioned on their longer-term views on EUR/USD between February 21 and March 21 expect, on average, the currency pair to trade around 1.06 by the start of April. In general, 54% (+3%) of participants believe the exchange rate will be generally above 1.06 in ninety days, and 18% (+2%) see it above 1.12. In the meantime, 19% (-1%) of those surveyed reckon the pair will be at parity or below. © Dukascopy Bank SA