- SWFX market sentiment is 56% bearish
- 51% of pending orders in 100-pip range are set to BUY
- 53% of traders are bullish on the Dollar
- Upcoming Events: FOMC Meeting Minutes
The Euro continued to advance against the Dollar, as Catalan leaders decided to halt cessation from Spain in order to continue negotiations. From technical perspective, the pair has all means to continue to climb to the top. However, at the end of the day everything will depend on the Fed Meeting Minutes, from which traders expect to get a clearer signal about interest rate hike in December.
The Euro fell modestly against the American peer, ignoring impressive gains in Germany's industrial production. The EUR/USD currency pair went down just 7 base points or 0.06% to finish the sessions slightly higher in the 1.1740 area.
Destatis revealed that industrial output in Germany rose at a faster-than-expected pace of 2.6% over the month of August, showing the largest monthly gain since July 2011. The strong figure suggested that the European biggest economy is likely to expand in the October quarter. In addition, an upbeat business sentiment and solid increase in industrial orders, which was driven by strong demand particularly from outside the Euro zone, pointed to further upswing in the industrial output.
FOMC Minutes
The only notable event that is expected to happen this day and that markets are actively anticipating is minutes of the Fed, from which traders are willing hear about probability of further interest rate hike in December.
EUR/USD climbs to test 1.1832
In line with expectations, the Euro continued to appreciate against the Dollar yesterday. The reason behind the surge was related not only to combined support formed by the 55-, 100- and 200-hour SMAs together with the weekly PP, which the pair used as a trampoline, but also to the fact that Catalonia signed but immediately suspended declaration of independence to bargain with Madrid. Accordingly, in the first half of the day the currency rate is expected to test a resistance located near the 1.1830 mark. Historically, this area proved to a significant barrier for the pair. From this perspective, there is a chance that it would halt the soar and make a short term rebound. In the meantime, there is a need to take into account an effect from the FOMC meeting, which is likely to strengthen the Dollar.
Hourly Chart
On a daily chart the currency rate continues to successfully climb to the top. The only notable resistance that it is facing at the moment is the 55-day SMA near 1.1840. Basically, the Euro could continue its rally against the Dollar today as well. However, there is a need to take into account an effect from the FOMC Meeting Minutes, which is likely to strengthen the buck. In addition to that, the high the rate is climbing, the higher is bearish sentiment among market participants.
Daily Chart
Traders become neutral
In result of the previous trading session the bearish market sentiment slightly increased, as 56% of open positions are short now.
In the meantime, the outlook for the two currencies against the rest of the traded financial instruments is the following: the Euro is 60% bearish and the Dollar is 53% bullish.
Traders of OANDA remain bearish, as 60% (+2%) of open positions are short. Meanwhile, SAXO are also bearish on this currency pair with 59% (+1%) of open short positions.
Spreads (avg, pip) / Trading volume / Volatility