- SWFX market sentiment is 62% bearish
- Trader pending orders 54% bullish
- Pair opened Friday's session at 1.1144
- Upcoming Events: EU Final CPI; ECOFIN Meetings; US Building Permits; US Housing Starts; Preliminary UoM Consumer Sentiment
The common European currency has pierced the support of the medium term ascending channel against the US Dollar. This move had been expected for a few weeks, and it is a clear signal that the pair is set to decline in the upcoming months. The reason for that can be found in the large timeframe charts.
The number of Americans filing for unemployment benefits dropped more than expected last week. The Labour Department reported on Thursday that initial jobless claims fell 8K to 237K in the week ended June 9, while market analysts anticipated a slighter decrease to 241K during the reported week. According to analysts, the US labour market is at or close to full employment, with the unemployment rate a 16- year low of 4.3%.
Various fundamentals from both sides
The scheduled fundamental events for the EUR/USD pair this Friday have to be looked at while dividing them into two groups, in regards to the impact on a certain currency. First of all the events, which impact the Euro, are set to occur. At 09:00 GMT the Final CPI of the Eurozone is set to be published. Meanwhile, the ECOFIN Meetings will take place the whole day, and some information might slip out of them. In the second half of the day, as the working hours begin in the US, data will be coming in from that side of the Atlantic. At 12:30 GMT the US Building Permits and Housing Starts release will take place. This data publication will be covered by the Dukascopy research team live. To access the webinar just click on the popup on your JForex platform or check out the webinar schedule on the Dukascopy website. Later on, at 14:00 GMT, the Preliminary UoM Consumer Sentiment will be published. However, this data release is unlikely to impact the markets.
EUR/USD leaves 1.12 mark
It seems that the third bounce off from the long term resistance did the trick. The common European currency has declined against the US Dollar to the weekly S1, which is located at the 1.1148 level. This fall was long expected on larger timeframe charts. It is most likely now that the currency exchange rate will continue on its path lower. In the process a new medium term pattern is expected to form, which should provide guidelines about the probable direction of the Euro against the Buck in the upcoming few months. However, for now the target zone is unclear. Meanwhile, from a technical perspective it can be observed that a depreciation of the Euro against the US Dollar is to be expected.
Hourly Chart
The daily chart shows that the combined support of the 38.20% Fibonacci retracement level, the 20-day SMA and the lower trend line of the medium term ascending channel pattern were not enough to stop the US Dollar appreciation against the common European currency. The mentioned cluster, which is located at the 1.1190 mark, due to the recent events is serving as a strong resistance, which will help the Greenback in holding the gains against the Euro.
Daily Chart
Bearish sentiment persists
SWFX traders are 62% short in regards to the pair on Wednesday. In the meanwhile, 54% of pending commands are to buy the Euro, compared to 52% of set up orders to sell the Euro on Thursday.
OANDA trader sentiment remains largely bearish, as 66.99% of open positions are short. Meanwhile, SAXO bank clients have slightly decreased their short position proportion, as 60.43% of open positions are short, compared to 64.49% on Thursday.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast shows EUR/USD will trade below 1.12 in September
Traders, who were questioned on their longer-term views on EUR/USD between May 16 and June 16, expect, on average, that the currency exchange rate may trade above 1.11 during the second week of September. In general, 53% of participants believe the exchange rate will be above 1.12 in the following ninety days. Meanwhile, 38% of respondents expect to see the rate below 1.10.