- SWFX market sentiment is 53% bearish (-1%)
- 57% of pending orders in 100-pip range are to SELL the Euro
- Pair is located at a speculated support level
- Upcoming events: Powell's testimony and ISM Manufacturing PMI
The Euro was little changed against the Greenback, following the release of the preliminary US Q4 economic growth. The EUR/USD exchange rate fell just five base points, or 0.04%, to the 1.2212 level and continued to fluctuate in the 1.2214 area.
The US economy grew in line with the forecast of 2.5% in the final quarter of 2017. It was the slowest growth rate in three quarters, as businesses invested less in equipment and inventories.
The US Dollar remained on a strong foothold, following the expressed optimism from Powell about economic conditions in the US. In the meantime, with inflation getting higher and continuously well performing economy, analysts expect the Fed to raise rates more than 3 times this year.
Powell's speech and a PMI
The economic calendars are showing that Jerome Powell is set to speak once more in front of the Congress. Meanwhile, a rather minor data release will occur at the same time.
Namely, the ISM Manufacturing PMI is set to be published at 15:00 GMT. Note that tit is the exact time, as the text of the Federal Reserve's Chairman's will published. Due to that reason the fluctuations could be massive as on Tuesday.
The data release will be covered by the Dukascopy research team on the bank's live webinar platform. The coverage is set to start ten minutes before the release. To join the webinar one needs to click on the notification that should pop up a minute before the start on all of the bank's trading platforms. On the other hand joining is possible at any time by either googling Dukascopy webinars or finding them in the TV section.
EUR/USD continues lower
During the early hours of Thursday's trading session the common European currency continued to lose ground against the US Dollar. Meanwhile, Dukascopy analysts spotted two notable facts about the pair's charts.The decline, which followed the first testimony of the head of the Federal Reserve, has confirmed that it is occurring in a narrow descending channel pattern.
Meanwhile, analysts looked for a possible level of support, which might force a reversal of the direction. As a result of the efforts, a possible support line of a long term almost horizontal pattern has been set near the 1.2170 mark.
The zone around this line should be watched carefully.
Hourly Chart
The daily chart at the moment is the one to focus at the most. The reason for that is the breaking of the previously active ascending channel's lower trend line.
Due to that reason, by looking at the recent high and low levels, the situation was reviewed. As a result of that review a new large scale channel has been noticed. The channel has a lower inclination, but it should still guide the Euro higher against the US Dollar in the upcoming months.
However, before that occurs the lower trend line of the channel needs to be reconfirmed. Most likely that will occur, when the 55-day SMA reaches the support line of the pattern and provides additional strength to the Euro against the Buck.
Daily Chart
Traders are bearish
The number of short positions of the EUR/USD exchange rate is 53% in this session (-2%).
The outlook for the two currencies against the rest of the traded financial instruments is as follows: the Euro is 61% bearish and the US Dollar is 56% bullish.
OANDA traders remain bearish in this session, as 57% of open positions, compared to 55% on the previous session. The bearish sentiment of Saxo Bank clients stands at 56% short positions (-2%).
Spreads (avg, pip) / Trading volume / Volatility