- SWFX market sentiment is 61% bearish
- Trader pending orders are 56% to sell
- Pair opened Friday's session at 1.0765
- Upcoming Events: US Capacity Utilization Rate; US Industrial Production; Preliminary UoM Consumer Sentiment
The number of Americans who filed for unemployment insurance last week decreased to 241,000, a survey from the Labor Department revealed on Thursday, following the preceding week's 243,000 filings. Meanwhile, market analysts anticipated a slight rise to 245,000 during the reported period. The number of new residential building permits issued in February fell 6.2%, the Census Bureau revealed on Thursday. Nevertheless, housing construction advanced 3% and was mainly driven by one-family house applications, whose growth hit a record since September 2007. The spike in construction was mainly attributable to the robust job market and healthier finances. Yet, high mortgage costs and increasing real estate prices remain an issue for potential home buyers.
Overall, the situation in the home-building industry remains positive, as the housing market index reached a 12-year high. The diffusion index fell to 32.8 in March, the Philadelphia Fed reported on Thursday. Nonetheless, it remained positive for eight consecutive months. The difference between firms who reported an increase in activity against decrease was 33%. Similarly, the difference between firms reported a rise in employment against unemployment was 17%. So, in general, regional manufacturers maintained optimism.
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Upcoming events: Minor data
At the end of the trading week there are three data releases scheduled in the United States. However, it is highly unlikely that they will increase the volatility in the financial markets by influencing the strength of the US Dollar. First of all at 13:15 GMT the US Capacity Utilization Rate and the Industrial Production will be published. Later, at 14:00 GMT the Preliminary University of Michigan Consumer Sentiment will be released.
Read More: Fundamental Analysis
EUR/USD reaches above 1.0750
Daily Chart: During the early hours of Friday's trading session the common European currency's surge against the US Dollar was stopped by the resistance put up by the upper Bollinger band, which was located at the 1.0786 level. As a result the rate was in a retreat. However, the retreat is likely going to be short lived. As the upper Bollinger band moves higher, the currency exchange rate will set its course to the weekly R2, which is located at 1.0806. There the pair might stop for a while, as the weekly R2 is strengthened by the 38.20% Fibonacci retracement level at 1.0826. The retracement levels have proven in the past to have enough strength not only to stop but also to reverse the rate's direction.Daily chart
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Hourly chart: The hourly chart reveals that the jump above the weekly R1 at 1.0740, was sudden and occurred at a moment, when it seemed that the pair has finally bounced off the resistance level. Th surge was stopped by the monthly R1, which has kept the rate lower for more than twelve hours. However, as the 20-hour SMA moves in and provides support, it seems that it is only a matter of time until the monthly R1 gives up.
Hourly chart
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Read More: Technical Analysis
Markets increase bearish sentiment
SWFX traders are bearish on the pair, as 61% of open positions are short, and 56% of set up orders are to sell.
OANDA traders are clearly bearish, as 60.10% of trader open positions are short on Friday, compared to 56.44% positions previously. In addition, SAXO bank clients are also on the bearish side, as 61.22% of open positions are short, compared to 59.33% on Thursday.
Spreads (avg,pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.06 in April
Traders, who were questioned on their longer-term views on EUR/USD between February 17 and March 17 expect, on average, the currency pair to trade around 1.06 by the start of April. In general, 53% (-1%) of participants believe the exchange rate will be generally above 1.06 in ninety days, and 16% (+1%) see it above 1.12. In the meantime, 20% of those surveyed reckon the pair will be at parity or below. © Dukascopy Bank SA