- SWFX market sentiment is 58% bearish
- Trader pending orders are 57% bearish
- Pair opened Friday's session at 1.0674
- Upcoming Events: EU CPI Flash Estimate; EU Core CPI Flash Estimate; US Core PCE Price Index; US Personal Spending; FOMC Member Dudley's Speech; US Chicago PMI; FOMC Member Kashkari's Speech; US Revised UoM Consumer Sentiment
The US economy expanded at a stronger than initially expected pace during the final quarter of 2016 amid higher consumer spending. The Commerce Department reported on Thursday the economy grew at a 2.1% annualised rate in the Q4 of 2016, compared to the previously estimated 1.9% pace. Nevertheless, for all of 2016, the economy expanded just 1.6%, the slowest pace of growth since 2011, following a 2.6% expansion in 2015. Moreover, the most recent economic indicators suggested that economic growth slowed further in the Q1 of 2017. According to the Atlanta Fed, the US economy expanded at a 1.0% rate in the Q1. However, economists claim that US employment data is more reliable than output data, as it paint a clearer picture of national income growth.
Thursday's data also showed consumer spending advanced 3.5% during the last quarter of 2016, up from the initially reporter 3.0% growth rate. Furthermore, domestic demand climbed 3.4% in the Q4 of 2016, the fastest pace of growth in two years, as imports posted a 9.0% jump, the biggest since the Q4 of 2014. Other data released on Thursday revealed that initial jobless claims dropped 3,000 to a seasonally adjusted 258,000 in the week ending March 25, remaining below the 300,000 level for 108 consecutive weeks.
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Upcoming events: Loads of data and events
Friday is the day when the emptiness of this week regarding fundamental events is getting filled. First of all the EU CPI and Core CPI Flash Estimates will be released at 09:00 GMT. US Data will be pouring in in the second half of the day. At 12:30 GMT the Core PCE Price Index and the US Personal Spending data will be released. Later, at 13:00 GMT FOMC member Dudley will give a speech. At 13:45 GMT the Chicago PMI will be available. Last but not least, at 14:00 GMT two events are scheduled, as FOMC member Kashkari will speak publicly and the Revised UoM Consumer Sentiment will be released.
Read More: Fundamental Analysis
EUR/USD trades below 1.07 mark
Daily Chart: During the early hours of Friday's trading session the common European currency found support against the Greenback in a combined support level, which is made up of the weekly S2 and 55-day SMA. Both of the support levels are located exactly at the 1.0675 mark. The pair fell sharply during Thursday's trading session, as the Buck surged all across the financial markets. If the fall continues, the rate is set to retreat to a much stronger support cluster, which begins with the 23.60% Fibonacci retracement level at 1.0639. On the other hand a rebound up to the 20-day SMA at 1.0708 might occur.Daily chart
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Hourly chart: The descending channel pattern, which can be observed on the hourly chart remains in force. The rate has followed in accordance with the pattern lower. However, the before mentioned weekly S2 has stopped the pair's decline and force the EUR/USD rate to trade almost flat. Although, if it continues like that the pair will encounter the upper trend line of the descending channel. Moreover, it is more likely that the 20-hour SMA, which is approaching from the upside, will push the rate lower.
Hourly chart
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Read More: Technical Analysis
Traders change opinion
SWFX traders have decreased their bearish outlook, as 58% of open positions are short, compared to 62% previously. Meanwhile, 57% of set up orders are to sell the Euro.
OANDA long persisting bearish sentiment has disappeared, as 50.64% of trader open positions are long on Friday, compared to 56.18% short positions previously. In addition, SAXO bank clients have done the same, as 53.82% of open positions are short, compared to 60.12% of open positions on Thursday.
Spreads (avg,pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.07 in July
Traders, who were questioned on their longer-term views on EUR/USD between February 31 and March 31 expect, on average, the currency pair to trade around 1.07 by the start of July. In general, 56% of participants believe the exchange rate will be generally above 1.06 in ninety days, and 22% (+1%) see it above 1.12. In the meantime, 12% of those surveyed reckon the pair will be at parity or below. © Dukascopy Bank SA