- SWFX market sentiment is 62% bearish
- Trader pending orders 54% bearish
- Pair opened Tuesday's session at 1.1149
- Upcoming Events: US Current Account; FOMC Member Kaplan's Speech
The common European currency is trading against the US Dollar, as expected. The pair has retreated down to the 1.1150 mark. However, future decline is being threatened by a strong support cluster near the 1.1120 level, as the lower Bollinger band of the daily chart has joined the weekly first support and the monthly pivot point.
US homebuilding activity rose slowed unexpectedly last month, official figures revealed on Friday. The Commerce Department reported that housing starts fell 5.5% to a seasonally adjusted annual pace of 1.09M units, the lowest since September 2016, following the preceding month's downwardly revised pace of 1.16M and falling behind analysts' expectations for decline to 1.23M-unit pace. On an annual basis, homebuilding dropped 2.4%.
US Current Account
There are two minor events scheduled for the day. Both events will affect the financial markets by changing the perspective on the US Dollar. However, a notable impact is most unlikely. First will be the release of the US Current Account at 12:30 GMT. Secondly, later in the day, at 19:00 GMT, FOMC Member Kaplan will give a speech, which might touch the topic of monetary policy.
EUR/USD channel pattern is spotted
On Tuesday morning various additional pieces of information were spotted on the hourly chart for the EUR/USD currency pair. First of all, it is clear that the 1.1140 level is working as a support level, as it has held the line and forced a rebound already twice. Secondly, a short term descending channel has been spotted. In accordance with the channel the pair is set to decline in a 45 degree angle. Meanwhile, regarding the next twenty four hours, the common European currency is highly likely going to surge until it bounced off a resistance level either at 1.1175 or 1.1190. After a bounce off the pair would continue the decline down to the weekly S1, which is located at the 1.1121 level. However, traders should take into account the mentioned 1.1140 level.
Hourly Chart
The daily chart reveals that the lower Bollinger band has moved lower and joined another support cluster. The band was located at the 1.1130 level, which is just ten base points above the weekly S1 at 1.1121. Moreover, the support cluster consists also of the monthly pivot point at the 1.1173 mark. If the described support cluster gets passed, then the currency pair's next targeted support might be the weekly S2, which is located the 1.1045 mark.
Daily Chart
Bearish sentiment persists
SWFX traders are 62% short in regards to the pair on Tuesday. In the meantime, trader set up orders are no longer bullish, as 54% of orders are to sell, compared to 56% of pending commands to buy the Euro on Monday.
Traders of OANDA have decreased their bearish sentiment in regards to the Euro, as 67.88% of open positions are short on Tuesday, compared to 71.84% previously. In addition, SAXO bank clients have done the same, as 60.00% of open positions are short, compared to 63.21% on Monday.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast shows EUR/USD will trade below 1.12 in September
Traders, who were questioned on their longer-term views on EUR/USD between May 20 and June 20, expect, on average, that the currency exchange rate may trade above 1.1150 during the third week of September. In general, 54% (+1%) of participants believe the exchange rate will be above 1.12 in the following ninety days. Meanwhile, 38% (-1%) of respondents expect to see the rate below 1.10.