- SWFX market sentiment is 54% bullish
- Trader pending orders are 55% to sell
- Pair opened Wednesday's session at 1.0538
- Upcoming Events: EU Long Term Refinancing Operation; US Existing Home Sales; FOMC Member's Powell's Speech; FOMC Meeting Minutes
Data released on Tuesday showed economic activity in the Euro zone perked up over the month of February, nearing a six-year high. The Markit flash PMI for the shared currency area hit the highest level in 70 months, surging to 56.0 in February from 54.4 registered in the preceding month and beating analysts' expectations for a 54.3 reading. Sufficient growth was registered in both services and manufacturing, with expansion in the latter sector outpacing services growth rate. More specifically, the manufacturing PMI climbed to 55.5 over the course of February compared with the previously reported 55.2, while experts penciled in a reading of 55.0.
For the services industry, the purchasing managers' index rose to 55.6, up from 53.7 observed in January. The gain came in ahead of market expectations for the index to stay unchanged from the previous month. Separately, Germany and France released their business activity figures, with the composite PMIs in the abovementioned countries jumping to 56.2 and 56.1 respectively. Elsewhere in the common currency area, economic activity growth rate peaked to a 14-month high.
Upcoming events: Central Banks
Both the ECB and the Federal Reserve are set to influence the financial markets during Wednesday's trading session. First will go the ECB at 10:30 GMT, when the bank will release its Long Term Refinancing Operation information. To put it in simpler terms, they will release, how much money they are putting in the markets through commercial banks. The second half of the day will begin with the US releasing minor data, as the US Existing Home Sales data will be published at 15:00 GMT. However, the most important events of the day will occur later in the day. At 18:00 GMT FOMC member Powell is set to give a speech prior to the top event of the day. At 19:00 GMT the FOMC Meeting Minutes will be released, and they are most likely to reveal the future direction of the US Dollar.
EUR/USD ready to pass 1.05 mark
Daily Chart: The common European currency did not stop its major fall against the US Dollar on Tuesday, as the currency exchange rate continued the decline into Wednesday's trading session. Previously, on Tuesday the pair fell down to the weekly S1 at 1.0529, which managed to hinder the fall of the rate. However, on early Wednesday morning the pair passed the support level and began to move further lower. The closest support level to the currency exchange pair is at 1.0488, where the monthly S1 is located at. Due to that it is most likely that the rate will surely fall below the 1.05 mark.Daily chart
Hourly chart: The hourly chart reveals that it was the 20-hour SMA, which stopped the Euro from rebounding against the US Dollar via the support of the weekly S1 at 1.0529. In addition, it can be seen that the hourly Bollinger bands are being bent, as the rate moves lower to the monthly S1.
Hourly chart
Markets become clearly bullish
SWFX traders are firmly bullish on the pair, as 54% of open positions are long. In the meantime, 55% of set up orders are to sell the Euro.
OANDA traders remain bullish on the pair, as 53.27% of trader open positions are long at the marketplace, compared to 54.18% on Monday. In the meantime, SAXO bank clients have become neutral, as 50.52% of the bank's clients are shorting the pair, compared to 51.85% previously.