- SWFX market sentiment is 63% bearish
- Trader pending orders 56% bullish
- Pair opened Monday's session at 1.1212
- Upcoming Events: FOMC Member Dudley's Speech; FOMC Member Evans's Speech; German Buba President Weidmann's Speech
After a short period of consolidation on Friday the EUR/USD currency exchange rate resumed to decline on Monday, as the pair encountered a strong resistance cluster. The pair firmly remains below the previous trend lines of the now broken ascending channel pattern. Meanwhile, technical pattern analysts are searching for the clues on where the borders of the new medium term pattern are located at.
US homebuilding activity rose slowed unexpectedly last month, official figures revealed on Friday. The Commerce Department reported that housing starts fell 5.5% to a seasonally adjusted annual pace of 1.09M units, the lowest since September 2016, following the preceding month's downwardly revised pace of 1.16M and falling behind analysts' expectations for decline to 1.23M-unit pace. On an annual basis, homebuilding dropped 2.4%.
Banker speeches
As on any other Monday, the schedule is almost empty in regards to fundamental events. However, there are speeches of various central bankers scheduled for the day. At 12:00 GMT the FOMC member Dudley is set to speak publicly. Afterwards at 23:00 GMT FOMC member Evans will give a speech. Meanwhile, there is also a speech, which is scheduled to occur in the EU, as the German Bundesbank President Weidman is set to give a speech at 15:00 GMT.
EUR/USD encounters resistance
The decline of the common European currency against the US Dollar continued on Monday. Although the currency exchange rate had regained some of its losses in the second half of Friday's trading session, that surge was short lived, as the currency exchange rate encountered the resistance of the 200-hour SMA, which on Monday morning had forced the Euro below the strong support cluster near the 1.1190 mark. Meanwhile, the rate still had the support of the 55-hour SMA at 1.1177. If that support level gets passed, the currency pair will be set to fall down to the 1.1110 level, where the next notable support cluster begins. However, it is quite possible that the decline will be hindered during today's trading session.
Hourly Chart
The daily chart reveals that the pair faced additional resistance from the 20-day SMA, which on Monday morning was located at the 1.1213 level. In addition, the chart shows that the pair's rebound on Friday occurred partly due to the fact that the decline of the Euro against the US Dollar was overextended. Such a statement is made due to the fact that the support of the lower Bollinger band was passed and bent during the last trading days of last week.
Daily Chart
Bearish sentiment persists
SWFX traders are 63% short in regards to the pair on Monday. In the meantime, 56% of pending commands are to buy the Euro.
Traders of OANDA have increased their bearish sentiment in regards to the Euro, as 71.84% of open positions are short on Monday, compared to 66.99% previously. In addition, SAXO bank clients have done the same, as 63.21% of open positions are short, compared to 60.43% on Friday.
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 19 and June 19, expect, on average, that the currency exchange rate may trade above 1.1150 during the third week of September. In general, 53% of participants believe the exchange rate will be above 1.12 in the following ninety days. Meanwhile, 39% (+1%) of respondents expect to see the rate below 1.10.