- SWFX market sentiment is 58% bearish
- Trader pending orders are neutral
- Pair opened Wednesday's session at 1.1187
- Upcoming Events: US Chicago PMI; US Pending Home Sales
On Wednesday morning the EUR/USD currency exchange remained below the strong resistance cluster near the 1.1190 mark. However, the currency pair had increased volatility during Tuesday's trading, which caused it to shortly trade above the weekly PP at 1.1204 and just above the second weekly support, which is located at the 1.1097 mark. In general it is still expected that the pair will decline, and such hypothesis is made by doing a gradual analysis of minor technical data.
The European Central Bank President Mario Draghi gave a speech at the European Parliament in Brussels on Monday. The ECB President acknowledged improving economic growth, but stated that stimulus and support measures were still needed to boost inflation. Apart from that, Draghi also pointed to weak wage growth in the Euro zone. Meanwhile, markets expected the Central bank to make a move at its June meeting amid pressures coming from more conservative economies, but Draghi's dovish comments on Monday weakened the odds.
Minor US data
Only in the case of large discrepancies from the forecasts some data sets might be a cause for volatility in the financial markets from the US Dollar's side. These data sets will be released in the second half of the day. The Chicago PMI is set to be out at 13:45 GMT, and the US Pending Home Sales data will follow shortly and be released at 14:00 GMT.
EUR/USD remains below 1.12 mark
After a large increase in the volatility of the EUR/USD currency pair during the second half of Tuesday's trading session the currency exchange rate remained below the 1.12 mark on Wednesday morning. If no fundamental events and information will inflow into the markets during Wednesday's trading the currency exchange rate is most likely going to decline. In such case it faces two lone support levels, which might hinder the fall. First of all it is the weekly S1 at the 1.1141 level, and, secondly, it is the weekly S2 at the 1.1097 level, which is supported by the close by 20-day SMA at 1.1077 mark.
Daily chart
The hourly chart for the pair reveals that the currency exchange rate made two attempts to surge higher. During the first one of those attempts the pair shortly traded above the 1.12 mark. However, since then the retreat has begun, and the Euro had only the support of the 55-hour SMA at 1.1166 and the lower Bollinger band at the 1.1160 mark against the US Dollar. Due to that it is assumed that the weekly S1 will be reached next soon.
Hourly chart
Read More: Technical AnalysisBearish sentiment persists
SWFX traders remain bearish, as 58% of open positions are short. Meanwhile, trader set up pending commands are neutral.
OANDA traders remain largely bearish, as 79.22% of open positions are short on Wednesday compared to 71.43% previously. In addition, SAXO bank clients are likewise bearish, as 65.15% of open positions are short, compared to 62.99% on Tuesday.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.11 by September
Traders, who were questioned on their longer-term views on EUR/USD between April 31 and today expect, on average, that the currency pair may trade slightly above 1.11 in on the last day of August. In general, 53% (+1%) of participants believe the exchange rate will be above 1.10 in the following ninety days, and 43% see it above 1.12.