- SWFX market sentiment is 53% bullish
- Trader pending orders are 61% to sell
- Pair opened Monday's session at 1.0702
- Upcoming Events: ECB President Draghi Speaks; European PMIs
As markets expected, the European Central Bank left its monetary policy unchanged at its January meeting on Thursday. Following the policy meeting, the ECB President Mario Draghi said the Euro zone's economic recovery remained subdued. Moreover, the ECB President stated at the post-meeting press conference that the region's economic growth is unlikely to gain momentum in the upcoming months due to the slow pace of structural reforms. According to Draghi, fiscal policies should also support the Euro zone's economic recovery within the European Commission's system of rules. The headline inflation rate is expected to rise more in the short-term, driven by higher energy prices. In the meantime, the Central bank said that underlying inflationary pressures in the region remained benign. However, the ECB expressed hopes for an increase in core inflation over the medium term. The EUR/USD pair hit its daily low of $1.0607, following Draghi's comments on inflation. The Central bank pointed to an uptick in manufacturing activity and rising confidence indicators. Nevertheless, it signaled it was ready to provide additional monetary stimulus if economic conditions worsen.
Back in December, the Bank cut its monthly asset purchases to 60 billion euros but extended the QE program by six months until at least March 2017.
Upcoming events: European fundamentals
At 11:30 on Monday ECB President Mario Draghi is set to give a speech regarding European common currency's monetary policy. That is the only notable event set to occur on Monday. However, on Tuesday morning the services and manufacturing PMI's off all of the Eurozone countries are set to be published from 8:00 GMT until 9:00 GMT.
EUR/USD surges to 1.0750 mark
Daily Chart: On early Monday morning the common European currency surged against the US Dollar, as the currency exchange rate reached the newly calculated first weekly resistance level at 1.0752. However, the pair was stopped by the resistance, which it is most likely to continue to attempt to break through. It is possible that the weekly R1 will be broken, and in such case the rate is set to jump to the 1.08 mark. Although, in case of a bounce off, the pair would fall as low as 1.0666, where the newly calculated pivot point is located at.Daily chart
Hourly chart: The hourly chart reveals that the recent surge up to the weekly R1 at 1.0752 is a result of a rebound against the 200-hour SMA on Friday. In addition, it can be seen that the currency pair is attempting to break through the resistance. Due to that no additional statements can be made regarding the future outlook of the pair.
Hourly chart
SWFX traders remain firmly bullish
SWFX traders continue to short the Euro, as 53% of trader open positions are short. In addition, 61% of trader set up orders were to sell the Euro.
OANDA traders remain bearish, regarding the pair, as 54.36% of open EUR/USD positions were short on Monday. Meanwhile, SAXO bank traders increased their bearish outlook, as 61.91% of open positions were short, compared to 60.08% previously.