EUR/USD breaks medium term pattern

Source: Dukascopy Bank SA
  • SWFX market sentiment is 60% bearish
  • 61.19% of pending orders in 100-pip range are set to sell
  • Pair opened Monday's session at 1.1776
  • Upcoming Events: FOMC Member Kashkari's Speech

The common European currency has broken out from the medium term ascending channel pattern against the US Dollar. As a result of the move the confirmation of the dominant channel up pattern is complete. The rate is likely going to decline in the upcoming weeks down to the channel's support line.

The Labour Department revealed that the US economy created 209K positions in July, surpassing forecasts for a 185K increase. In the meantime, the unemployment rate dropped to 4.3% from 4.4% in the reported period, matching expectations. Strong figures in conjunction with 0.3% wage growth, the strongest gain since February, provided good signs to expect better CPI and PPI reports this week. In this context, the Federal Reserve would be reassured that further policy normalisation is reasonable, keeping additional rate hikes on the table.

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Single Fed speech



During the next 24 hours there is only one event scheduled, which is worth being mentioned. At 17:25 GMT on Monday the FOMC Member Kashkari is set to give a public speech. However, the Fed speakers have begun leaking information so often that their impact is insignificant.



EUR/USD breaches patterns

Following the massive plunge mid-Friday, EUR/USD breached two patterns simultaneously, namely, an ascending wedge and a longer-term channel up. The pair halted near the 200-hour SMA circa 1.1770— a level which has managed to provide support this morning, as well. It seems that the rate is starting to recover losses, thus approaching a resistance cluster formed by the 55– and 100-hour SMAs. In general, the pair is expected to make a retracement from the bottom channel boundary in the 1.1840/60 area that should be realised within the upcoming 24 hours. Technical indicators suggest that the Euro may remain relatively stable against the Greenback, thus entering a consolidation period between the aforementioned resistance cluster and the 200-hour SMA.

Hourly Chart


The daily chart reveals no additional information, which could help out in a short or long term analysis. The only exception to this rule is the fact that the 20-day SMA is moving upwards near the 1.1670 mark.

Daily Chart




SWFX traders are not changing positions

The situation in the SWFX markets remains unchanged, as SWFX traders are 60% short in regard to the EUR/USD pair. The proportions of the positions have not changed for six consecutive trading sessions. Meanwhile, 50.43% of trader set up pending commands are to sell the Euro.

Traders of OANDA remain bearish, as 67.11% of open positions are short. Meanwhile, SAXO bank clients are also not changing their opinion, as 59.22% of traders are short, compared to 63.49% previously.


Spreads (avg, pip) / Trading volume / Volatility

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