- SWFX market sentiment is 58% bearish
- 59% of pending orders in 100-pip range are set to BUY
- 55% of traders are bullish on the Dollar
- Upcoming Events: US Building Permits, Housing Starts and Crude Oil Inventories
Although the currency exchange rate failed to pass through the weekly S1 from the first attempt, the pair is still expected to move in the southern direction. The main reason for such assumption is a combination of moving averages that are pressing the pair from the top. In addition to that, the sentiment becomes more and more bearish and today has already reached 58%.
The Euro kept falling against the Greenback after the row of releases showing mostly strong results for the US. The EUR/USD currency pair lost 12 base points to touch the weekly low of 1.1744. Though, bulls managed to change the direction of the trend.
The Labour Department showed that the US import prices grew at the strongest pace of 0.7% in more than a year in September, due to higher costs of food and petroleum. Meanwhile, underlying inflation marked a modest increase of 0.3% in the reported period. The following report from the Fed showed that the US industrial production gained 0.3% in the prior month amid fading effects of Hurricanes Irma and Harvey, allowing utilities output to bounce back.
US housing data
According to economic calendar, the main event of the day will happen at 12:30 GMT when the Census Bureau will reveal the latest information about the state of the US housing market. Although this is a valuable data for general understanding of development of the US economy, but from technical perspective this event is unlikely to cause notable volatility in the markets.
EUR/USD breaks through 200-hour SMA
In accordance with expectations, the Dollar continued to gain value against the common European currency, experiencing pressure from the 55-, 100- and 200-hour SMAs as well as the weekly PP. Despite the fact that the pair failed to pass through the weekly S1 at 1.1735 from the first attempt, it is still expected to move in the southern direction, trying to reach the 100% Fibonacci retracement level at 1.1715. This scenario is supported not only by the average market sentiment, which remains 57% bearish, but also by an aggregate of technical indicators, which sends strong sell signal for this trading session. The only event than might add some volatility in the markets and lead to short-term recovery of the Euro are opening remarks that will be delivered by Mr. Draghi at the ECB conference.
Hourly Chart
Daily chart clearly reveals that today the pair is testing the weekly S1 at 1.1735. For such large timeframes these pivot points usually do not present significant obstacles. In contrast a combination of the 100% Fibonacci retracement level at 1.1715 and the bottom boundary of an ascending channel the barrier that most probably will force the pair to make U-turn.
Daily Chart
Traders remain bearish
In result of the previous trading session the bearish market sentiment slightly increased, as 58% 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% (+0%) of open positions are short. Meanwhile, SAXO are also bearish on this currency pair with 58% (-2%) of open short positions.
Spreads (avg, pip) / Trading volume / Volatility