EUR/USD reaches 1.0666 mark

Source: Dukascopy Bank SA
  • SWFX market sentiment is 56% bearish
  • Trader pending orders are 60% to sell
  • Pair opened Friday's session at 1.0683
  • Upcoming Events: US Advance GDP; US Core Durable Goods Orders
On early Friday morning the EUR/USD currency exchange rate was struggling near the weekly PP, which is located at 1.0666. The fall to the just mentioned level of significance was expected for the whole week, and it occurred during Thursday's trading session. However, that seems not to be the end of the pairs decline, as most technical clues indicate that the currency exchange rate might continue its move lower in the near future.

German business sentiment fell unexpectedly this month as companies downgraded their outlooks, a private survey revealed on Thursday. The Munich-based Ifo Institute reported its Business Climate Index, which is based on approximately 7,000 monthly survey responses in the construction, manufacturing, retail and wholesale sectors, decreased to 109.8 from 111.0 points seen December, while market analysts anticipated a slight acceleration to 111.3 in the reported period. Furthermore, there was a slight confidence fall in wholesale, while retailing sentiment dropped to a five month-low. In the meantime, the Current Assessment Index advanced to 116.9 in January from 116.7 points registered in the prior month, matching analysts' expectations. However, the Business Expectations Index, which tracks sentiment in the next six months, declined to 103.2 during the reported period from 105.5 in December, hitting the lowest level in five months.

The latest Ifo report suggests that companies are positively confident in near-term growth. In addition, manufacturers intend to increase prices. According to forecasts, German industries are likely to gain support from the firming global economy and ECB‘s accommodative monetary policy. Exports are set to appreciate 2.8% this year on the stronger Euro.

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Upcoming events: US GDP and Core Durable Goods Orders

At 13:30 GMT there will be a package of fundamental data released in the US. The data is surely set to affect the markets, as it is the once in three months released US GDP, combined with US Core Durable Goods Orders. The Dukascopy research team will be covering the data release on our live webinar. Traders are welcomed to tune in. That will be possible by clicking on the notification that will pop up in the Dukascopy trading platform before the coverage of the data publication.



EUR/USD reaches 1.0666 mark

Daily Chart: As it was forecasted, the common European currency dropped to the weekly PP, which is located at 1.0666, against the US Dollar. In addition, during the move the pair touched the 1.0658 mark. The currency exchange rate is still set to move even lower before a rebound occurs, as the next support level is near the 1.0610 mark. That support cluster is made up of three levels of significance and two trend lines, which makes a rebound an almost clear certainty. However, that might not occur during Friday's trading session, as daily aggregate technical indicators for the pair forecast a surge by the end of the day.

Daily chart
© Dukascopy Bank SA

Hourly chart: The hourly chart reveals important details regarding the EUR/USD currency exchange rate. When the pair reached the weekly PP, it failed to push through it and rebounded as a result. However, the rebound did not last long, as in three hours it was stopped by the 200-hour SMA. Afterwards, another failed attempt occurred. Most recently, around 7:00 GMT, the currency pair has moved lower, as the Greenback has managed to break the weekly PP, and the rate is set to fall to the weekly S1 at 1.0613.

Hourly chart
© Dukascopy Bank SA


SWFX traders largely bearish

SWFX traders remain bearish, as 56% of open positions are short on Friday. In the meantime, 60% of trader set up orders are set up to sell the Euro.


OANDA traders decreased their bearish outlook, regarding the pair, as 52.36% of open EUR/USD positions were short on Friday, compared to 55.81% on Thursday. Meanwhile, SAXO bank traders have done the same, as 61.22% of open positions were short, compared to 64.61% previously.

Spreads (avg,pip) / Trading volume / Volatility



Average forecast says EUR/USD will trade around 1.06 in April

Traders, who were questioned on their longer-term views on EUR/USD between December 27 and January 27 expect, on average, the currency pair to trade around 1.06 by the middle of April. In general, 54% (+1%) of participants believe the exchange rate will be generally below 1.06 in ninety days, and 25% see it below 1.02. In the meantime, 15% (-1%) of those surveyed reckon the pair will trade above 1.12 in three months.

© Dukascopy Bank SA

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