- SWFX market sentiment is 56% bearish
- 52% of pending orders in 100-pip range are to BUY the Euro
- The Euro demonstrates high volatility on Monday morning
- Upcoming events: US ISM Non-Manufacturing PMI, FOMC Member Quarles to speak
The ISM Manufacturing PMI release presented a stronger-than-anticipated data, causing a further Dollar strengthening and a subsequent down move in the EUR/USD exchange rate. The pair declined 10 base points, or 0.08%, reaching the 1.2163 level.
The ISM stated that the US Manufacturing PMI increased from 59.1 in January to 60.8 in February, representing the highest mark since May 2004.
The US manufacturing activity strengthened in the reported month mainly due to expending exports that are showing their highest growth rate since April 2011. In fact, growing employment rate also was one of the factors driving the overall expansion in the domestic manufacturing sector.
ISM Non-Manufacturing PMI
The only notable fundamental events scheduled for this session is the US the ISM Non-Manufacturing PMI for February and a speech by the Federal Reserve Governor Randal Quarles about foreign bank regulation at 1500GMT and 1815GMT, respectively.
EUR/USD likely to fluctuate below 1.2350
Following a test of a five-month ascending channel circa 1.2170, the common European currency was driven by strong upside potential.The pair advanced by 85 pips during the second part of Friday, but was once again stopped by the 23.60% Fibo retracement near 1.2350. As apparent on the chart, the Euro has failed to surpass this mark for the last seven trading sessions, thus setting a strong resistance level for the following sessions.
Meanwhile, a strong hourly plunge pushed the rate down to the 55-, 100– and 200-hour SMAs and the weekly PP near 1.2270 on Monday morning. It is likely that this area holds strong and therefore allows bulls to resume their movement towards the 1.2350 level.
Hourly Chart
During the second part of last week, the Euro has bounced off the 55-day SMA and is moving closer to the 1.24 area. However, the general trend does show that the pair is likely to depreciate in the medium term, suggesting that the current long-term channel could be breached to the downside circa 1.2170. Technical indicators on the daily time-frame are likewise supportive of the bearish scenario.
Daily Chart
Traders are bearish
The number of short positions of the EUR/USD exchange rate is 56% in this session.
The outlook for the two currencies against the rest of the traded financial instruments is as follows: the Euro is 63% bearish and the US Dollar is 56% bullish.
OANDA traders have increased their bearish sentiment by two percentage points, thus currently standing at 59% short positions. The bearish sentiment of Saxo Bank clients stands at 58% short positions.
Spreads (avg, pip) / Trading volume / Volatility