- SWFX market sentiment is 58% bearish
- Trader pending orders are 52% bearish
- Pair opened Tuesday's session at 1.0867
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Upcoming Events: CB Consumer Confidence; US New Home Sales
The Euro traded in a tight range with reduced volatility against the US Dollar in the aftermath of the French election. However, that is about to change. The hourly chart is the one, which reveals that the EUR/USD currency exchange rate is about to reach higher and touch the upper trend line of a long term pattern.
Services and manufacturing activity in the Euro zone rose more than expected in April, suggesting that the region's economy started the Q2 of 2017 with solid growth. HIS Markit reported on Friday that its Flash Purchasing Managers' Index for the Euro zone's manufacturing sector came in at 56.8, following March's final reading of 56.2 and surpassing analysts' expectations for 56.1. Furthermore, the Flash Services PMI came in at 56.2 in April, while markets anticipated an unchanged reading of 56.0 during the reported period. Thus, the Flash Composite PMI advanced to 56.7 from March's 56.4, hitting its highest since April 2011. Economists stated that Friday's PMI surveys provided enough evidence to say that the Euro zone economy started the Q2 with strong growth.
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Upcoming events: CB Consumer Confidence and New Home Sales
Market participants will be watching out for fundamental data at 14:00 GMT. At that time the US CB Consumer Confidence and US New Home Sales data will be published. However, these data sets have not historically showed enough strength to cause notable volatility.
Read More: Fundamental Analysis
EUR/USD stays below resistance
The common European currency remained almost unchanged on Tuesday morning against the US Dollar, as the currency exchange rate traded near the 1.0860 mark. The currency exchange rate was located below the combined resistance of the monthly R1 at 1.0876 and the weekly R2 at 1.0878. This resistance level has kept the pair lower since the consolidation, which followed in the aftermath of the first round of the French Election. It is highly possible that the pair will remain almost unchanged by the end of the day, as it still remains above the upper Bollinger band.
Daily chart
The hourly chart reveals a surprise. After four attempts and a loss of volatility on the hourly chart the currency exchange rate managed to break above the mentioned resistance level. If the situation does not change, the currency pair has a free path to surge up to the 1.0950 level, where the long term pattern's upper trend line is located at.Hourly chart
Read More: Technical Analysis
Market sentiment strongly bearish
Traders remain bearish on the pair, as 58% of open positions are short. Meanwhile, 52% of trader set up orders are to sell the Euro.
OANDA traders are bearish, as 62.87% of trader open positions are short on Tuesday, compared to 59.58% previously. Moreover, SAXO bank clients also remain bearish, as 63.91% of open positions are short, compared to the 58.51% positions on Monday.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.08 by the end of July
© Dukascopy Bank SATraders, who were questioned on their longer-term views on EUR/USD between March 25 and April 25 expect, on average, the currency pair to trade around 1.08 in the second half of July. In general, 49% (-2%) of participants believe the exchange rate will be above 1.08 in ninety days, and 21% (+1%) see it above 1.12. In the meantime, 7% of those surveyed reckon the pair will be at parity or below.