- SWFX market sentiment is 64% bullish (+1%)
- 68% of pending orders in 100-pip range are to SELL the Euro
- Upcoming fundamental events: ECB President Draghi to speak, US Building Permits and Housing Starts
The Euro remains trading in a short-term channel up.
The Markit released Manufacturing Purchasing Managers Index data that came out better-than-expected of 54.4, compared to the 53.9 in the previous period.
"At first glance, the mild acceleration in the rate of output growth and rise in the headline PMI would appear positive," Rob Dobson, a Markit director, said. "However, scratch beneath the surface and the rebound in the PMI from April's 17-month low is far from convincing."
US Building Permits
Tuesday's trading session will start with the ECB President Mario Draghi speaking at the Bank's Forum on Central Banking at 0800GMT.
Later in the day, the US Census Bureau is to release the monthly Building Permits and Housing Starts at 1230GMT.It is expected that the number of new residential building permits declined to 1.35M in May, compared to 1.36M during the preceding month.
EUR/USD approaches strong resistance
The Euro gained slight advantage against the US Dollar on Monday. It managed to breach the 55-hour SMA and test the 1.1650 mark this morning.Technical indicators are gradually recovering from the massive plunge that occurred last week. It is likely that the price continues to edge higher during the first part of the day until 1.17 is reached. This territory should hinder or even halt further advance, as several SMAs on both the 1H and 4H time-frames are located around it. The ultimate high today should be 1.1750 which has provided strong support/resistance since mid-May.
Meanwhile, bears are expected to prevail later in the day, thus sending the Euro back lower and no lower than 1.15. By and large, the pair could be located near the 1.1600/50 range early tomorrow.
Hourly Chart
The common European currency has fallen considerably against the US Dollar since mid-April which marks a 5.95% plunge within a couple of weeks. The pair started to recover on May 30 after hitting a six-month low of 1.1550. It is expected that this up-move continues in the medium term.
The 1.18 mark should eventually surrender, thus allowing the pair to appreciate until the 55- and 200-day SMAs and the monthly R1 near 1.20. Daily technical indicators are likewise pointing to a soon recovery.
Daily Chart
Bulls remain in charge
EUR/USD remains strongly bullish with 64% of open positions being long (+1%).
The outlook for the two currencies against the rest of the traded financial instruments is as follows: the Euro is 58% bullish and the US Dollar is 62% bearish.
OANDA traders are bullish on the pair with 57% of open positions being long today (-1%). Saxo bank has likewise returned in the bullish territory with 55% long positions (+2%).
Spreads (avg, pip) / Trading volume / Volatility