- SWFX market sentiment is 55% bearish
- 50.22% of pending orders in 100-pip range are set to SELL
- 58% of traders remain bullish on the Dollar against the rest of the currency market
- Upcoming Events: US CPI and Unemployment Claims
Due to market reaction to release of data on the US PPI, the currency rate managed to break through the bottom edge of a senior ascending channel. In theory, now the Euro has to start to gradually recover after yesterday's depreciation. However, the outcome of this trading day will depend on content of the report published by the Bureau of Labour Statistics on the US CPI.
The EUR/USD revealed muted response on a slighter-than-expected increase in the US producer prices. However, in the next couple of hours the Euro depreciated significantly against the Greenback, falling to the weakest level in a week below the 1.1900 mark.
The Labour Department revealed that the US producer prices accelerated growth at the strongest pace in four months amid an increase in gasoline prices. The report showed that the country's PPI for final demand rose 0.2% in August, slightly below expectations for a 0.3% increase. Wednesday's data were not quite as strong as the Fed would like to consider to support an increase in core consumer prices to the Banks 2% target.
US Inflation report
Today for the given currency pair there will be only one notable data release. Namely, an announcement of latest numbers on the US inflation. By now, experts project that it will increase from 0.1% to 0.3%, which could lead to further appreciation of the buck. Whether this will be true you might find out at our mini-webinar, which will start at 12:30 GMT.
EUR/USD breaks long-term channel
Due to release of negative data in the United States on Producer Price Index the currency exchange rate made suddenly dropped down to the monthly PP, which is located at the 1.1881 level. In result of this action, the pair broke through the lower trend-line of a three month long senior ascending channel. At the moment, the only barrier that it faces from the south is the bottom edge of another more recently formed ascending channel. In this sense, the buck might drag the pair even lower. On the other hand, the pair is likely is stuck near the above monthly PP for some time, while traders are anticipating a release of data on the US CPI at 12:30 GMT. Accordingly, the positive result will strengthen the downside momentum even more, while the negative will give the Euro a necessary impulse to recover from yesterday's loss.
Hourly Chart
Due to the abovementioned release, the currency pair has finally left dominant ascending channel and now is gradually heading towards the bottom trend-line of recently formed channel up. From this perspective, a rebound is expected to happen soon. Either the pair will find support already at the monthly PP at 1.1881, or it will slip a little bit lower and bounce off from the bottom edge of the channel.
Daily Chart
Traders still bearish on the pair
The SWFX market sentiment remained unchanged since yesterday and now is 55% bearish. In the meantime, the outlook for the two currencies against the rest of the traded financial instruments is as follows. Euro is 58% bearish, while for the Dollar 58% bullish.
Traders of OANDA remain bearish, as 59% of open positions are short. Meanwhile, SAXO are also bearish on this currency pair with 57% of open short positions.
Spreads (avg, pip) / Trading volume / Volatility