- SWFX market sentiment is 51% bullish
- Trader pending orders are 63% to sell
- Pair opened Monday's session at 1.0608
- Upcoming Events: German Flash Services PMI, French Flash Services PMI, German Flash Manufacturing PMI, French Flash Manufacturing PMI, EU Flash Services PMI, EU Flash Manufacturing PMI
US building permits advanced more than expected whereas homebuilding activity weakened in January, official figures revealed on Thursday. The Commerce Department reported building permits rose 4.6% to a seasonally adjusted annual pace of 1.29 million in January, following the previous month's upwardly revised 1.23 million units and surpassing analysts' expectations for a 1.23 million unit rate. The increase caught markets by surprise, as the figure reached the highest level since November 2015, suggesting solid growth in starts in the middle of 2017.
Meanwhile, housing starts declined 2.6% to an annualized rate of 1.25 million units in the same month, following December's upwardly revised reading of 1.28 million, whereas economists expected them to increase to a 1.23. Analysts suggest that the housing market recovery is likely to be sustained by strong labor market, which supported household formation. Separately, the Philadelphia Federal Reserve said its Manufacturing Index jumped to 43.3 points in February, the highest level in 33 years, driven by a jump in new orders, which climbed to 38.0 from 26.00. Data also showed the Employment Index fell to 11.1 from 12.8, while the Business Outlook Index for the next six months slid to 53.5 points.
Upcoming events: European PMI's
There are several PMI data releases scheduled for Tuesday's session from 08:00 GMT until 09:00 GMT. The notable data release will start in France and gradually move over the whole of Europe with the German data in the middle, at 08:30 GMT, and the common European indicators at 09:00 GMT. Overall, the forecasts for the industry are positive. However, market experts are expecting that the rate of improvement is likely to slow down.
EUR/USD returns to 1.06 level
Daily Chart: The common European currency had retreated to the 1.06 level against the US Dollar on Monday morning. At that level the currency exchange rate managed to find support, as the 55-day SMA, which is located exactly at 1.06, is now also supported by the weekly PP at 1.0604. It is highly possible that the currency pair will surge during the session up to the monthly PP, which is located at 1.0650. The monthly PP, which previously failed to play a notable role, on Monday is strengthened by the 20-day SMA at 1.0654. Due to that reason it is unlikely that the resistance will be broken.Daily chart
Hourly chart: The hourly chart shows that the pair made two attempts to pass the weekly PP's support at 01:00 GMT and 06:00 GMT. Currently the pair is trending upwards. However, it is unlikely that the pair will pass the resistance cluster consisting of the 20, 55, 200-hour SMAs, respectively at 1.0622, 1.0639 and 1.0633. In addition, the hourly upper Bollinger is closing in on the rate, as at 9:00 GMT Bollinger band was at 1.0640.
Hourly chart
SWFX trader sentiment unchanged
SWFX traders remain neutral bullish on the pair, as 51% of trader open positions are long on Monday. Meanwhile, 63% of trader set up orders are to sell the Euro.
OANDA traders have become firmly bullish on the pair, as 54.18% of trader open positions are long at the marketplace, compared to 52.08% on Friday. In the meantime, SAXO bank clients have decreased their largely bearish view, as 51.85% of the bank's clients are shorting the pair, compared to 58.24% previously.