- SWFX market sentiment is 58% bearish
- Trader pending orders are 51% bearish
- Pair opened Friday's session at 1.0986
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Upcoming Events: US Average Hourly Earnings; US Non-Farm Employment Change; US Unemployment Rate; Fed Chair Yellen's Speech
The Euro has jumped more than 100 base points during Thursday's trading, which is a larger amount than it was expected. Due to that move the long term ascending channel seems to be broken, which means that the pair is at a critical point. The outcome of the French presidential election is most likely going to show the direction of the currency.
The number of Americans filling for unemployment benefits dropped markedly last week, pointing to the tightening labour market. The Department of Labour reported on Thursday that initial jobless claims fell to 238K in the week ending May 28, the lowest in 17 years, following the preceding week's 257K and topping expectations for a slight decrease to 246K. That marked the 113th week of claims remaining below the 300K level, the longest stretch since 1973.
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Upcoming events: US data and Yellen's speech
There are two times to watch the fundamentals on Friday. At 12:30 GMT the US Average Hourly Earnings, US Non-Farm Employment Change and the Unemployment Rate will be published and covered by the Dukascopy research team. However, a speech by Janet Yellen may most likely cause more impact, as at 17:30 GMT the Chairwoman of the Federal Reserve will give a speech. Although, all of it might be erased by the French presidential election.
Read More: Fundamental Analysis
EUR/USD above expected heights
The common European currency traded even above the previously expected levels against the US Dollar, as the currency exchange rate was at the 50.00% Fibonacci retracement level on Friday morning. The retracement level is located at the 1.0977 level, and it seems to be providing support for additional Euro gains. The gains are possible, as the upper trend line of the long term ascending channel has been broken due to the recent fundamental changes in Europe. Due to that reason it is possible that the rate will surge above the 1.10 mark by the end of the day.
Daily chart
On the hourly chart it can be observed that all of the moving support levels, with the exception of the 20-hour SMA, are below even the hourly lower Bollinger band. The rate seems to be consolidating for the past hours, but it manages to find support in the mentioned retracement level and the upper trend line of the now broken long term ascending channel.Hourly chart
Read More: Technical Analysis
Market sentiment strongly bearish
SWFX traders remain bearish, as 58% of open positions are short on Friday. Meanwhile, only 51% of trader set up orders are to sell the Euro.
OANDA traders have increased their bearish sentiment, as 65.31% of trader open positions are short on Friday, compared to 61.15% previously. Moreover, SAXO bank clients have done the same, as 64.56% of open positions are short, compared to the 61.25% positions on Thursday.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.09 in August
© Dukascopy Bank SATraders, who were questioned on their longer-term views on EUR/USD between April 5 and today expect, on average, the currency pair to trade around 1.09 in early August. In general, 43% (-6%) of participants believe the exchange rate will be above 1.10 in ninety days, and 27% see it above 1.12. In the meantime, 7% of those surveyed reckon the pair will be at parity or below.