- SWFX market sentiment is 61% bearish
- Trader set up pending orders are 54% to sell
- Pair opened Tuesday's session at the 1.1174 level
- Aggregate daily technical indicators bet EUR/USD will decline
- Economic events to watch over the next 24 hours: US Building Permits; US Housing Starts
Confidence among US homebuilders improved in the ninth month of the year, official data revealed on Monday. The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) jumped to 65 in September, the highest reading since October last year, whereas market analysts expected the Index to come in at 60 points. The August reading was revised down to 59 from the originally reported reading of 60. Any reading above 50 indicates an overall positive outlook. The Index was seen mostly at 58 points, rising to 61 in January. According to the report, current sales advanced to 71 in September from August's 65, the fastest pace in nearly nine years, whereas sales expectations in the next six months climbed to 71 from the preceding month's 64. In the meantime, buyer traffic rose to 48 from last month's 44 points, remaining below the 50-point level. In regional terms, on a three-month moving average basis, homebuilder confidence in both the Northeast and South increased one point to 42 and 64 points, respectively, as well as it improved in the West to 73 from last month's 69 points. The Index found builder sentiment held steady at 55 in the Midwest.
Consumer prices in the United States rose more than expected last month, official data revealed on Friday. According to the US Bureau of Labor Statistics, the overall Consumer Price Index (CPI) jumped 0.2% month-over-month in August, compared to the preceding month's reading of 0.0%, while market analysts anticipated a slighter acceleration to 0.1% during the reported month. On an annual basis, the CPI increased 1.1%, up from July's 0.8%. The socalled core CPI that excludes goods with high price volatility, such as food and energy, advanced 0.3% on a monthly basis in August after rising 0.1% in July, whereas economic desks expected the core inflation to grow 0.2% last month. On a yearly basis, the indicator climbed 2.3% during the reported period, slightly up from July's 2.2% reading. The modest rise in inflation last month is likely to be welcomed by the Federal Reserve at its meeting next Tuesday and Wednesday. However, it is widely expected to leave interest rates on hold amid weak retail sales, industrial production and job growth. Within the headline CPI basket, the price of gasoline dropped 0.9% last month, compared to July's 4.7% fall. Food prices were unchanged, whereas the cost of food consumed at home decreased for the 4th consecutive month.
Upcoming fundamentals: US Housing data
The EUR/USD pair will be affected on Tuesday by two simultaneous data releases at 12:30 GMT in the United States. Among the two data releases the more important is the US Building Permits data, which is forecasted to be at 1.17 million. On the other hand new housing starts will be published, and they are forecasted to be a 1.19 million.
EUR/USD squeezed in on Tuesday
Daily chart: The common European currency traded almost flat on Tuesday morning against the US Dollar. Previously, the currency exchange rate surged and ended day's trading at 1.1173 level. However, during the session it managed to reach the resistance cluster above it at 1.1190, and the rate bounced off it. The pairs fluctuations on Tuesday morning occur between the before mentioned resistance cluster and two simple moving averages below at 1.1156 and 1.1147. It is most likely, that the pair will remain in limbo between the two levels for the rest of the day.Daily chart
Hourly chart: The hourly chart for the pair shows that the currency exchange rate gradually surged on Monday, while being slowed down by the 20-hour SMA. However, by 15:00 GMT the rate had broken through the weekly and monthly pivot points respectively at 1.1195 and 1.1190. Although, the pair changed direction and fell. Most recently it has found support in the 20-hour SMA around 1.1170 level, as it prepares for a second attempt on the resistance cluster.
Hourly chart
Traders remain bearish
OANDA traders remain almost neutral on the pair, as 50.44% of open positions are short. In the meantime, SAXO Bank clients have increased their bearish stance, as their open short positions are now at 63.23% compared to 60.63% of last trading session.