- SWFX market sentiment is 63% bearish
- Trader pending orders are 61% bearish
- Pair opened Tuesday's session at 1.0975
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Upcoming Events: US Building Permits; US Housing Starts; US Capacity Utilization Rate; US Industrial Production; EU Final CPI
The Euro is reaching long unseen heights against the US Dollar on Tuesday. However, the currency exchange rate is facing strong resistance levels from a technical perspective. Meanwhile, there is a significant number of data releases scheduled in the US, which might reverse the direction or enforce the already occurring decline of the US Dollar.
Manufacturing activity in the New York state deteriorated unexpectedly in May, falling into the negative territory for the first time since October, official figures revealed. The regional Federal Reserve reported on Monday that its Empire State Manufacturing Index came in at –1.0 in the reported month, following the preceding month's 5.2 points. Meanwhile, market analysts anticipated a climb to 7.2 in May. The drop may be a sign of an activity slowdown in the manufacturing sector.
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Upcoming events: Loads of US Data
In the second half of Tuesday's trading session US data will start coming in. First of all at 12:30 GMT the Dukascopy research team will cover the release of the US Building Permits data and the Housing Starts. Some consider the Building Permits data a high impact release. Later on in the day, at 13:15 GMT the US Capacity Utilization Rate and the Industrial Production data will be out. In addition, traders should watch out on Wednesday morning for the EU final CPI data at 09:00 GMT.
Read More: Fundamental Analysis
EUR/USD reaches above 1.10 mark
The common European currency continued to surge against the US Dollar on Tuesday morning. The currency exchange rate reached above the 1.10 mark and was set to score additional gains. The pair is most likely going to reach the resistance put up by the weekly R1, which is located at the 1.1025 level. Due to the fact that the first weekly resistance is strengthened by three more additional levels of significance, it is highly unlikely that the rate will pass the resistance cluster, which is located from 1.1025 to 1.1057. The rate is more likely to retreat after a few failed attempts.
Daily chart
The hourly charts were broken by the fundamental news from the US. As the Empire State Manufacturing Index was released drastically below the expected level, the US Dollar plummeted, and with it the 50.00% Fibonacci retracement level was broken. At the moment only a rather narrow ranged ascending channel with a very short term outlook can be spotted. However, it is unlikely that benefit can be gained from it.Hourly chart
Read More: Technical Analysis
Market sentiment strongly bearish
SWFX market sentiment remains bearish, as 63% of open positions are short, and 61% of trader set up orders are to sell the Euro.
OANDA traders remain bearish, as 65.44% of trader open positions are short on Tuesday, compared to 61.49% previously. In addition, SAXO bank clients are also bearish, as 64.85% of open positions are short, compared to the 59.73% positions on Monday.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.10 in August
© Dukascopy Bank SATraders, who were questioned on their longer-term views on EUR/USD between April 16 and today expect, on average, the currency pair to trade around 1.10 in August. In general, 48% (-1%) of participants believe the exchange rate will be above 1.10 in ninety days, and 35% see it above 1.12. In the meantime, only 2% of those surveyed reckon the pair will be at parity or below.