After a notable jump on Thursday the EUR/USD pair has retreated to trade back below the weekly R2. However, clues indicate that the surge will continue on Friday. The hourly chart reveals that the resistance of the weekly R2 has been once more broken and the range up to the weekly R3 remains free of resistance. Although, technical analysis might be flawed in the next few trading sessions, as a fundamental event is about to occur in the form of the French presidential election.
US manufacturing activity in the Mid-Atlantic region slowed markedly in April, official figures revealed on Thursday. The Philadelphia Federal Reserve reported its Manufacturing Index dropped to 22.0 in the reported month, following March's reading of 32.8 and falling behind analysts' expectations for a decrease to 25.6 points. Analysts stated that business optimism prompted by Donald Trump's win in the presidential election started to fade, putting downward pressure on business activity.
Upcoming events: Markets concentrate on French Election
EUR/USD back below weekly R2
On Friday morning the common European currency against the US Dollar traded once more below the weekly R2, which is located at the 1.0729 level. The reason for that is the fact that the resistance put up by the weekly R3 at 1.0780 held its ground on Thursday. It is most likely that large fluctuations in the currency pair will not occur during today's trading session, as the French presidential elections will be held on Sunday. These elections are the main focus now for Euro traders, and the results are sure to cause a fundamental shift in the currency pricing.
Daily chart
Hourly chart
Read More: Technical AnalysisMarket sentiment mostly bearish
SWFX traders remain bearish, as 54% of open positions are short. In addition, 52% of trader set up orders are to sell the Euro.
OANDA traders are neutral, as 51.19% of trader open positions are long on Friday, compared to 53.21% previously. However, SAXO bank clients remain bearish, as 59.74% of open positions are short now, compared to the 58.43% positions on Thursday.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.08 in July
Traders, who were questioned on their longer-term views on EUR/USD between March 21 and April 21 expect, on average, the currency pair to trade around 1.08 in the second half of July. In general, 51% (+1%) of participants believe the exchange rate will be generally above 1.08 in ninety days, and 21% (+1%) see it above 1.12. In the meantime, 7% (-1%) of those surveyed reckon the pair will be at parity or below.