- SWFX market sentiment is 52% bullish
- Trader pending orders are 61% to sell
- Pair opened Wednesday's session at 1.0576
- Upcoming Events: German Unemployment Change, Spanish Manufacturing PMI, US Core PCE Price Index, FOMC Member's Kaplan's Speech, FOMC Member's Brainard's speech, ISM Manufacturing PMI
The US economy grew less than expected in December quarter even in spite of higher consumer spending observed in the reported period. Figures released on Tuesday showed the US economy grew at an annualised pace of 1.9% in the Q4, following a strong 3.5% reading registered in the preceding quarter and falling behind analysts' expectations for a 2.1% rise. In the report, the Commerce Department highlighted that the economic growth was mainly boosted by consumer spending that was revised to 3.0% from 2.5% reported previously. With household spending accounting for no less than 70% of the American economic activity, analysts around the world remained optimistic on the overall growth in the country in the months ahead. Furthermore, the report revealed that the surge in purchases by consumers in the final quarter of 2016 was mainly driven by higher sales of new cars and trucks.
Apart from that, Americans were seen to have spent more on health care. On balance, inventory investment was revised down to $46.2B from $48.7B, while spending on equipment rose a more modest 1.9% instead of 3.1% originally estimated. Moreover, there were changes in trade figures, with imports climbing 8.5% along with a sharp 4.0% decline in observed in exports
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Upcoming events: Several medium-impact events in EU and US
The main events in the US are the release of Core PCE Price index at 13:30 GMT and ISM manufacturing PMI at 15:00 GMT. The first one will reveal the amount of the consumed goods in the US and the second one will show the expansion of US production. However, from the side of the EU the main event will be the release of the EU CPI Flash Estimate and EU Core CPI Flash Estimate at 10:00 GMT.
Read More: Fundamental Analysis
EUR/USD positioned for major fall
Daily Chart: The common European currency opened Wednesday's trading against the US Dollar near the 1.0575 level. However, during the first hours of the day's trading the rate moved lower, and passed the closest support level before a large range without any level of significance. Due to that fact the currency exchange rate positioned itself for a major fall, as the closest support was at the 1.0491 level, where the weekly S1 located at. It is likely that the rate will fall to this support soon, and there it will be stopped for at least a while, as the lower Bollinger band is closing in to support the weekly S1.Daily chart
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Hourly chart: The hourly chart reveals that the EUR/USD pair has begun its descent along an 18-hour short-term channel. The 20-day SMA and the lower Bollinger Band which are located at 1.0573 and 1.0528 respectively are likely to support this channel. Since there are no other resistance levels nearby, it is likely that the exchange rate will continue its descent along the channel.
Hourly chart
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Read More: Technical Analysis
SWFX sentiment unchanged
SWFX traders still have not changed their opinion regarding the pair, as 52% of open positions remain long. Meanwhile, 61% of trader set up orders are to sell the Euro.
OANDA traders have changed their bullish view on the pair, as only 53.46% of trader open positions are long at the marketplace, compared to 54.19% previously. Alternatively, SAXO bank clients have decreased their bearish outlook of the pair, as 50.48% of the bank's clients are shorting the pair, compared to 51.39% on Tuesday.
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 February 1 and March 1 expect, on average, the currency pair to trade around 1.06 by the start of April. In general, 50% (-1%) of participants believe the exchange rate will be generally below 1.06 in ninety days, and 26% (-3%) see it below 1.02. In the meantime, 11% (-1%) of those surveyed reckon the pair will trade above 1.12 in three months. © Dukascopy Bank SA