- SWFX market sentiment is 61% bearish
- Trader pending orders are 54% bearish
- Pair opened Tuesday's session at 1.0899
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Upcoming Events: EU Preliminary GDP, Spanish Unemployment Change, German Unemployment Change
On Tuesday morning the Euro continued the rebound against the US Dollar, which began during the last hours of Monday's trading. It is most likely that the rebound will continue until the pair once more reaches the upper trend line of the long term ascending channel pattern. The reason for that is the fact that there are no fundamental events scheduled for the day, which could provide large enough impact.
The Purchasing Managers' Index for the US manufacturing sector grew less than analysts estimated. According to the Institute for Supply Management, the PMI lost 2.4% compared to the previous month and tumbled to 54.8%, while experts anticipated only a slight decrease of 0.6%. Although in April the PMI rose at the slowest pace this year so far, it still remained above the 12-month average of 53.6%. The ISM report showed that the New Orders, Employment and Supplier Deliveries Indices dropped 7.0%, 6.9% and 0.8%, accordingly. Meanwhile, both Inventories and Prices Indices posted a 2% advance, which indicated that manufacturing companies stockpiled more raw materials than in the previous month and their costs increased.
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Upcoming events: EU events
Tuesday is a quiet day for the EUR/USD currency pair, as nothing notable is set to occur. However, traders could look out for two medium impact events, which are scheduled to occur on Wednesday morning. At 7:00 GMT the Spanish Unemployment Change will be out, and they will be followed by German Unemployment Change at 7:55 GMT. Although, the most notable will be the EU Preliminary GDP data at 9:00 GMT.
Read More: Fundamental Analysis
EUR/USD surges above 1.09 level
During the early hours of Tuesday's trading session the common European currency was scoring gains against the US Dollar, as the currency exchange rate passed the 1.09 mark. The pair faces no technical resistance up to the 1.0958 level, where the weekly R1 is located at. Moreover, just above that level of significance there are other levels, which are strengthening the weekly R1. On the other hand the currency pair might retreat by the end of the day, as the closest support is the weekly PP, which is a lone level at 1.0890.
Daily chart
It can be observed on the hourly chart that the currency exchange rate is in the process of a rebound against the already mentioned pivot point. The surge is being slowed down by the upper Bollinger band. However, the currency pair is being supported by the 55 and 100-hour SMAs, which are located just below the 1.09 level. Due to hat fact it is most likely that a surge will occur eventually.Hourly chart
Read More: Technical Analysis
Market sentiment strongly bearish
SWFX traders remain bearish on the pair, as 61% of open positions are short. In addition, 54% of trader set up orders are to sell.
OANDA traders remain bearish, as 62.39% of trader open positions are short on Tuesday, compared to 61.47% previously. Moreover, SAXO bank clients also remain bearish, as 63.32% of open positions are short, compared to the 62.93% positions on Monday.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.085 in August
© Dukascopy Bank SATraders, who were questioned on their longer-term views on EUR/USD between April 2 and today expect, on average, the currency pair to trade around 1.085 early August. In general, 58% (-2%) of participants believe the exchange rate will be above 1.08 in ninety days, and 23% (-1%) see it above 1.12. In the meantime, 6% (-1%) of those surveyed reckon the pair will be at parity or below.