- SWFX market sentiment is 57% bearish
- 53% of pending orders in 100-pip range are set to BUY
- 55% of traders are bullish on the Dollar
- Upcoming Events: US Empire State Manufacturing Index
Despite a release of worse than expected data, the currency exchange rate failed to surge above the monthly PP at 1.1875 and made a rebound. From this perspective, the pair is expected to continue to move in the southern direction. However, there is a need to bear a possibility of a short term rebound from the 200-hour SMA.
The Greenback depreciated significantly against the Euro on the US economic reports on Friday. The EUR/USD exchange rate jumped 61 base points or 0.52% to enter the 1.1870 area close to the weekly high. Though, the pair gradually returned to pre-data levels, as the EUR/USD remained under the bearish sentiment, putting an exchange rate lower.
The Labour Department showed that the US Consumer Price Index edged 0.5% higher in September, the strongest gain since January, which put the yearly rate of consumer inflation to 2.2% in the reported period. Separate report showed a 1.6% increase in the country's retail sales, where its sustainable firmness could cause a cease of low inflation trend and confirm the Fed's stance to raise interest rates anytime soon.
Empire State Manufacturing Index
The only macroeconomic event that is worth following today will happen at 12:30 when the Federal Reserve Bank of New York will release an update on the Empire State Manufacturing Index that reflects opinion of manufacturers in the State of New York about current and general business conditions.
EUR/USD starts trading near weekly PP at 1.1810
In line with expectations, the currency pair continued to move horizontally in anticipation of release of information about the US CPI. Although the data appeared to be worse than expected, the rate failed to surge above the monthly PP at 1.1875. As a result, new trading week it started at the updated weekly PP at 1.1810, being squeezed between the 55- and 100-hour SMAs from the top and the 200-hour SMA from the bottom. This fact suggests that despite that the average market sentiment is predominantly bearish, the pair is likely to fail to pass through the 1.1783 mark in one go. However, since the pair has recently made a breakout from the rising wedge, in general, it is expected to stick with the southern direction.
Hourly Chart
Daily chart clearly shows how the currency pair faced resistance represented by the monthly PP at 1.1875 and was forced to retreat. From this perspective, the Greenback is expected to continue to recover against the Euro looking to the 100% Fibonacci retracement level as a possible support target.
Daily Chart
Traders remain bearish
In result of the previous trading session the bearish market sentiment slightly decreased, as 57% 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 61% bearish and the Dollar is 55% bullish.
Traders of OANDA remain bearish, as 64% (+1%) of open positions are short. Meanwhile, SAXO are also bearish on this currency pair with 60% (-1%) of open short positions.
Spreads (avg, pip) / Trading volume / Volatility