- SWFX market sentiment is 58% bearish
- Trader pending orders 57% bullish
- Pair opened Monday's session at 1.1475
- Upcoming Events: EU Final CPI; US Empire State Manufacturing Index
The common European currency is not losing value against the US Dollar, as it has been expected by some. The reason is the fact that the fundamental macroeconomic US data released on Friday forced the currency pair into a jump, as the US Dollar lost value.
Consumer prices in the United States were flat, while retail sales dropped for the second consecutive month in June. The Labour Department reported on Friday that its CPI registered an unchanged reading in the observed month, missing market expectations for a 0.1% rise, as the cost of mobile services and gasoline declining. On a yearly basis, the index surged 1.6% in June, continuing to ease from February's 2.7%, when it showed the strongest gain in five years.
Minor data releases
The week is set out to start quietly, as there are two data releases scheduled for the day, which are worth being mentioned. At 9:00 GMT the final EU CPI is scheduled to be published. In the second half of the day the US Empire State Manufacturing Index will be out at 12:30 GMT. However, both of these data releases have rarely shown any kind of impact on the financial markets.
EUR/USD is about to be squeezed in
On Monday morning the common European currency had lost ground against the US Dollar. The pair had retreated below the freshly calculated weekly PP, which is located at the 1.1443 mark. Due to that reason the weekly PP could be considered as a resistance level. However, the currency exchange rate was about to be approached from the downside by the 55 and 100-hour SMAs, which both fluctuated at the 1.1430 mark. It is most likely that the pair will get squeezed in between the mentioned level of significance and pressure will begin to build up. Although, it can be clearly observed that the pressure could cause only a break out to the upside. Meanwhile, it is also possible that the rate does not get squeezed in at all, and a surge would begin as soon as the rate is approached by the SMAs.
Hourly Chart
The daily chart reveals that the uptrend still remains in force. The currency exchange rate has simply encountered the resistance of the upper trend line of a long term ascending channel. Most likely a decline is still set to occur in the next few trading sessions, instead of the expected jump directly to the 1.15 mark.
Daily Chart
Bearish sentiment persists
The situation in the SWFX markets remains unchanged, as traders remain bearish with 58% of open positions being short, and 57% of trader set up orders are to buy the Euro.
Traders of OANDA are bearish, as 69.93% of open positions are short. Meanwhile, SAXO bank clients also remain at the bearish front, as 64.76% of their trader open EUR/USD positions are short.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast shows EUR/USD will trade below 1.13 in October
Traders, who were questioned on their longer-term views on EUR/USD between June 17 and July 17, expect, on average, that the currency exchange rate may trade near 1.13 during the second week of October. In general, 65% (+1%) of participants believe the exchange rate will be above 1.12 in the following ninety days. Meanwhile, 30% (-2%) of respondents expect to see the rate below 1.10.