- SWFX market sentiment is 56% bearish
- Trader pending orders are neutral
- Pair opened Wednesday's session at 1.0673
- Upcoming Events: ADP Non-Farm Employment Change; ISM Non-Manufacturing PMI; FOMC Meeting Minutes
US manufacturing activity rose in line with analysts' expectations last month, a private survey revealed on Monday. The Institute for Supply Management reported its Purchasing Managers' Index for the manufacturing sector came in at 57.2 in March, down from the preceding month's 57.7. However, the figure met market forecasts. Out of the 18 industries, 17 reported growth last month. Data also showed that the sharp oil price rebound contributed most to the manufacturing sector recovery over the past several months. Nevertheless, some manufacturing companies projected activity growth to remain flat in the upcoming months. The New Orders Index came in at 64.5 points, following the February reading of 65.1. However, the gauge if new orders remained at its three-year highs, suggesting that the sector would remain on a solid growth track. Manufacturers also pointed to rising raw material prices, providing further evidence that inflationary pressures continued to build in the US economy. Meanwhile, Markit reported that the group's PMI for the US manufacturing sector dropped to 53.3 last month, the lowest in six months, compared to the prior month's 53.4, whereas analysts anticipated a slight rise to 53.5 points. Furthermore, Markit said that the New Orders Index came in at its slowest pace since October.
Thursday's data also showed consumer spending advanced 3.5% during the last quarter of 2016, up from the initially reporter 3.0% growth rate. Furthermore, domestic demand climbed 3.4% in the Q4 of 2016, the fastest pace of growth in two years, as imports posted a 9.0% jump, the biggest since the Q4 of 2014. Other data released on Thursday revealed that initial jobless claims dropped 3,000 to a seasonally adjusted 258,000 in the week ending March 25, remaining below the 300,000 level for 108 consecutive weeks.
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Upcoming events: Independent data and FOMC
During Wednesday's trading session there are important events scheduled, which are likely to cause volatility in the financial markets from the side of the US Dollar. First of all at 12:15 GMT the ADP Non-Farm Employment Change will be published. This data release will be covered by the Dukascopy research team online. Afterwards, at 14:00 GMT the ISM Non-Manufacturing PMI will be published. However, the most important data release of the day will be the FOMC Meeting Minutes at 18:00 GMT.
Read More: Fundamental Analysis
EUR/USD attempts to break resistance
Daily Chart: During the early hours of Wednesday's trading session the common European currency attempted to break the resistance against the US Dollar put up by the monthly pivot point at the 1.0685 level. The attempt failed and the currency exchange rate retreated to trade below the 55-day SMA, which was located at the 1.0674 mark. Due to the facts that the pair now faces a strong resistance, and the range of almost 50 base points is almost free below it, a decline of the currency pair is expected. The pair is likely set to decline once more to the 23.60% Fibonacci retracement level, which is located at the 1.0639 level.Daily chart
© Dukascopy Bank SA
Hourly chart: The hourly chart reveals that the currency pair has managed to surge pass the two hourly SMAs, which previously were providing resistance to the currency exchange rate. Due to the fact that these levels of significance are now providing support, it is highly likely that the expected decline will not occur during today's trading session.
Hourly chart
© Dukascopy Bank SA
Read More: Technical Analysis
Markets with mixed views
SWFX traders remain bearish on the pair, as 56% of open positions are short. Meanwhile, trader set up orders are neutral.
OANDA traders remain in the bullish territory, as 54.45% of trader open positions are long on Wednesday, compared to 53.67% previously. However, SAXO bank clients are once more bearish 54.26% of open positions being short now, compared to the 53.89% of long positions on Tuesday.
Spreads (avg,pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.075 in July
Traders, who were questioned on their longer-term views on EUR/USD between March 5 and April 5 expect, on average, the currency pair to trade around 1.075 at the start of July. In general, 42% (-2%) of participants believe the exchange rate will be generally above 1.08 in ninety days, and 24% (-2%) see it above 1.12. In the meantime, 11% (-1%) of those surveyed reckon the pair will be at parity or below. © Dukascopy Bank SA