- SWFX market sentiment is 62% bearish
- Trader pending orders are 62% bearish
- Pair opened Thursday's session at 1.0766
- Upcoming Events: US Final GDP; US Unemployment Claims; FOMC Member Kaplan's Speech
Pending home sales increased substantially and, thus, surprised many experts who did not expect such a leap. In February, the Pending Home Sales Index spiked 5.5% and reached the highest level in almost a year and the second highest level in over a decade. Growth was partially attributable to a record-warm end of winter, which motivated people to start looking for a house more actively than usual. Another factor that boosted sales was households' concern over a possible rise of interest rates by the end of this year. However, the main reason behind increased sales was strong demand, which was driven by improving economic conditions in the US. Yet, many potential home-buyers faced the problem of supply shortages, which negatively impacted prices, especially in the lower and mid-market price ranges.
Other data released on Wednesday revealed that US crude oil inventories rose 900,000 barrels last week, following the preceding week's gain of 5 million barrels. Meanwhile, analysts anticipated a climb of 1.2 million barrels during the reported week. Oil prices rose shortly after the release, with WTI jumping above $49 per barrel. Data suggests that the OPEC production deal cut has finally started bearing fruits.
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Upcoming events: US GDP and Unemployment Claims
The quiet days for fundamentals this week have passed. Today, at 12:30 GMT, there will be the start of incoming US data. At that time the US Final GDP and the US Unemployment Claims will be released. This data release will be covered live on the Dukascopy webinar platform by the Dukascopy research team. Moreover, at 15:00 GMT FOMC member Kaplan is set to give a public speech.
Read More: Fundamental Analysis
EUR/USD reaches below 1.0750 mark
Daily Chart: On Thursday morning the common European currency traded against the US Dollar near the 1.0750 level, as it was fluctuating between two levels of significance. The rate reached this level due to fundamental events like dovish ECB monetary policy signals and the triggering of Article 50 by the UK. From the upside the currency exchange rate is facing the combined resistance of the monthly R1 at 1.0772 and weekly PP at the 1.0780 mark. Meanwhile, immediate support to the pair was provided by the weekly S1 at 1.0736. It is likely that the rate will continue to move lower in the near future, as that is the medium term direction set by the rebound from the long term resistance line.Daily chart
© Dukascopy Bank SA
Hourly chart: The hourly chart reveals that the short term descending channel pattern discovered recently is still in force. The rate is approaching the weekly S1 and is positioned to break it, as only the lower Bollinger band stands in the way of a Greenback appreciation against the Euro. Moreover, all of the hourly SMAs, which provided support previously, have been passed.
Hourly chart
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Read More: Technical Analysis
Markets remain bearish
SWFX traders remain bearish, as 62% of open positions are short and 62% of trader set up orders are to sell.
OANDA bearish sentiment persists, as 56.18% of trader open positions are short on Thursday, compared to 58.54% positions previously. In addition, SAXO bank clients are also bearish, as 60.12% of open positions are short, compared to 62.57% on Wednesday.
Spreads (avg,pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.07 in June
Traders, who were questioned on their longer-term views on EUR/USD between February 30 and March 30 expect, on average, the currency pair to trade around 1.07 by the start of July. In general, 56% (-2%) of participants believe the exchange rate will be generally above 1.06 in ninety days, and 21% (+1%) see it above 1.12. In the meantime, 12% (-1%) of those surveyed reckon the pair will be at parity or below. © Dukascopy Bank SA