- SWFX market sentiment is 51% bearish
- Trader pending orders are 53% bearish
- Pair opened Wednesday's session at 1.0731
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Upcoming Events: EU Final CPI; US Crude Oil Inventories
The Euro has reached new heights against the US Dollar. However, resistance has been encountered by the currency pair. The currency exchange rate has two possible scenarios for the day, which both are technical, as there are no notable events scheduled to occur during the day's trading.
US homebuilding activity dropped more than expected last month amid the unusually warm weather and weaker manufacturing activity, official figures revealed on Tuesday. The US Department of Commerce reported that housing starts fell 6.8% to a seasonally adjusted rate of 1.22M, as construction of single-family homes in the Midwest posted the largest decline since 2014. Meanwhile, market analysts anticipated a slighter drop to a 1.25M unit rate in March, following the preceding month's upwardly revised 1.30M unit rate. On an annual basis, housing starts were up 9.2%. Data also showed that building permits climbed to a 1.26M unit rate in March, compared to the previous month's upwardly revised 1.22M unit rate, whereas analysts expected a rise to 1.25M unit rate.
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Upcoming events: EU CPI
Euro traders might want to take a look at the EU Final CPI, which is set to be published early during the day. The data will be published at 09:00 GMT. Meanwhile, the only data release, which might interest fundamental data traders, will be the publication of the US Crude Oil Inventories at 14:30 GMT. This data mainly affects the price of crude oil. However, some argue that it also has an effect on gold prices.
Read More: Fundamental Analysis
EUR/USD meets resistance on Wednesday
The common European currency has reached the resistance put up by the weekly R2 at 1.0729 against the US Dollar. On Wednesday morning the currency exchange rate was in a slight retreat, as a consolidation of positions was occurring after the almost 100 base point surge of Tuesday. There are two possible short term outcomes for the pair. It can soon resume the surge and set its eyes on the weekly R3, which is located at the 1.0780 level. On the other hand the pair might bounce off the weekly R2 and retreat back to the combined support of the 20-day SMA at 1.0690 and the monthly PP at 1.0686.
Daily chart
It can be observed on the hourly chart that the various hourly SMAs have been left far behind below the currency exchange rate. However, there is one important detail, which has to be noted. Although the currency exchange rate had slipped below the weekly R2 during the morning hours of Wednesday's trading session, the 20-hour SMA was moving in from the downside to provide support.Hourly chart
Read More: Technical Analysis
Market sentiment mostly neutral
SWFX traders have shifted their positions, as 51% of open positions are short on Wednesday, compared to 51% long on Tuesday. Meanwhile, 53% of set up orders are to sell.
OANDA traders have joined the other market placed in being neutral, as 50.76% of trader open positions are long on Wednesday, compared to 58.17% previously. However, SAXO bank clients have become bearish, as 58.31% of open positions are short now, compared to the 50.46% positions on Tuesday.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.08 in July
© Dukascopy Bank SATraders, who were questioned on their longer-term views on EUR/USD between March 19 and April 19 expect, on average, the currency pair to trade around 1.08 at the start of July. In general, 49% (-1%) of participants believe the exchange rate will be generally above 1.08 in ninety days, and 19% (-5%) see it above 1.12. In the meantime, 8% (+1%) of those surveyed reckon the pair will be at parity or below.