- SWFX market sentiment is 57% bearish
- Trader pending orders are 53% bearish
- Pair opened Monday's session at 1.0659
- Upcoming Events: US ISM Manufacturing PMI; FOMC Member Dudley's Speech; FOMC Member Harker's Speech
The US economy expanded at a stronger than initially expected pace during the final quarter of 2016 amid higher consumer spending. The Commerce Department reported on Thursday the economy grew at a 2.1% annualised rate in the Q4 of 2016, compared to the previously estimated 1.9% pace. Nevertheless, for all of 2016, the economy expanded just 1.6%, the slowest pace of growth since 2011, following a 2.6% expansion in 2015. Moreover, the most recent economic indicators suggested that economic growth slowed further in the Q1 of 2017. According to the Atlanta Fed, the US economy expanded at a 1.0% rate in the Q1. However, economists claim that US employment data is more reliable than output data, as it paint a clearer picture of national income growth.
Thursday's data also showed consumer spending advanced 3.5% during the last quarter of 2016, up from the initially reporter 3.0% growth rate. Furthermore, domestic demand climbed 3.4% in the Q4 of 2016, the fastest pace of growth in two years, as imports posted a 9.0% jump, the biggest since the Q4 of 2014. Other data released on Thursday revealed that initial jobless claims dropped 3,000 to a seasonally adjusted 258,000 in the week ending March 25, remaining below the 300,000 level for 108 consecutive weeks.
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Upcoming events: ISM PMI and Fed speeches
On Monday there are few notable events scheduled, which trader might take into account. First of all at 14:00 GMT the ISM Manufacturing PMI is set to be released. This is the most important data release during the day, as it is the only one, which might cause volatility in the markets. At 14:30 GMT FOMC member Dudley is set to give a speech. In the evening, at 19:00 GMT, another speech by a FOMC member will take place, as Harker is set to speak publicly.
Read More: Fundamental Analysis
EUR/USD declines below 1.07 mark
Daily Chart: During the early hours of Monday's trading session the common European currency scored slight gains against the US Dollar. However, the currency exchange rate was still positioned for further losses. The pair faced the resistance put up by the 55-day SMA, which was located at the 1.0674 level, and the monthly PP at 1.0685 mark. The fall of the currency pair might be hindered by the 23.60% Fibonacci retracement level, which is located at the 1.0639 level. The retracement level is also supported by the 100-day SMA at the 1.0624 level. However, a hindrance for long is unlikely.Daily chart
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Hourly chart: The descending channel pattern, which dominated the currency exchange rate for 110 hours, has been broken. The currency exchange rate managed to break out to the upside, as it approached the before mentioned cluster of resistance, which is located on the daily chart. Due to that reason the formation of a new pattern is to be expected.
Hourly chart
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Read More: Technical Analysis
Markets with mixed views
SWFX traders remain bearish on the pair, as 57% of open positions are short on Monday. Meanwhile, 53% of trader set up orders are to sell the Euro.
OANDA traders have moved into the bullish side, as 51.47% of trader open positions are long on Monday, compared to 50.64% positions previously. However, SAXO bank clients have increased their bearish sentiment, as 55.12% of open positions are short, compared to 53.82% of open positions on Friday.
Spreads (avg,pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.08 in July
Traders, who were questioned on their longer-term views on EUR/USD between March 3 and April 3 expect, on average, the currency pair to trade around 1.08 at the start of July. In general, 43% of participants believe the exchange rate will be generally above 1.08 in ninety days, and 26% (+4%) see it above 1.12. In the meantime, 12% of those surveyed reckon the pair will be at parity or below. © Dukascopy Ban SA