- SWFX market sentiment is 61% bearish
- Trader pending orders 51% bearish
- Pair opened Tuesday's session at 1.1183
- Upcoming Events: US CB Consumer Confidence; Chairwoman of the Federal Reserve Janet Yellen's Speech
On Tuesday the EUR/USD currency pair continued to fluctuate between the levels, which squeezed it in on Monday morning. The main reason for such fluctuations must be the expectation of the Janet Yellen's speech. However, short term technical clues indicate that the pair is set to surge in the short term.
The European Central Bank President Mario Draghi reported on Tuesday that in order to overcome Europe's income inequality authorities should focus more on education, innovation and investment in human capital. According to the ECB President inequality in the Euro zone grew markedly since the last global financial crisis. Thus, governments should consider adopting policies aimed at redistributing wealth. According to data from Eurostat, the inequality level has increased sharply since the crisis in countries like France and Spain.
Janet Yellen' speech in focus
During the day the markets will see one data release, which might affect the strength of the US Dollar. It will be the release of the CB Consumer Confidence at 14:00 GMT. However, it will make no difference, as Janet Yellen is set to give a speech at 17:00 GMT. That is the most important event of the day.
EUR/USD continues to surge
As it was expected the common European currency found support against the US Dollar, and the currency exchange rate continues on its set part higher. Moreover, during Monday's trading the pair managed to touch the 1.1220 mark. The Euro has set its eyes on the 1.1233 mark against the Buck, as that is the closest support level, which is likely to be reached. At that level the weekly R1 is located at. It is most likely that the 55-hour SMA, which helped the rate in its rebound on Monday, will push the pair higher until it reaches the mentioned resistance level. However, the weekly R1 might not be reached during Tuesday's trading, as the upper trend line of the short term ascending channel pattern still remains in the way of the pair above the 1.12 mark.
Hourly Chart
The daily chart reveals another resistance level, which might be the real reason for the EUR/USD pair's stagnation. The 20-day SMA continues to provide resistance at the 1.1206 level. However, it is most likely that the smaller timeframe ascending channel will have enough momentum to pierce the resistance level.
Daily Chart
Bearish sentiment persists
SWFX traders are 61% short in regards to the pair on Tuesday. Meanwhile, 51% of trader set up orders are to sell the Euro.
Traders of OANDA are still bearish, as 66.15% of open positions are short on Tuesday, compared to 69.91% previously. In addition, SAXO bank clients also remain bearish, as 64.70% of open positions are short, compared to 63.76% on Monday.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast shows EUR/USD will trade at 1.12 in September
Traders, who were questioned on their longer-term views on EUR/USD between May 27 and June 27, expect, on average, that the currency exchange rate may trade at 1.12 during the last week of September. In general, 59% (+2%) of participants believe the exchange rate will be above 1.12 in the following ninety days. Meanwhile, 36% (-3%) of respondents expect to see the rate below 1.10.