The common European currency seems to have finally met a worthy resistance level against the US Dollar. The pair has reached the upper trend line of the long term ascending channel near the 1.0950 mark. Various signals reveal that the currency exchange rate is set to decline during the day's trading.
The Conference Board Consumer Confidence Index dropped more than experts estimated. In April, it lost 3.8% and reached 120.3, thus, marking the first decline since January. The fall was mainly attributable to the less optimistic view of business conditions and the labour market in the upcoming six months. As a result, the number of respondents, who evaluated business conditions as "good", decreased from 32.4% to 30.2% and the share of those, who assessed the available number of jobs in the market as "plentiful", plunged from 31.8% to 30.8%. In addition, the number of people who evaluated business conditions as "bad" increased slightly from 13.1% to 13.8%.
Upcoming events: US Crude Oil Inventories
Euro reaches 1.0950 mark
On Wednesday morning the common European currency had reached the 1.0950 mark against the US Dollar. Initially it might seem that the pair will surge to the weekly R3 and the 50.00% Fibonacci retracement level, which are both located at 1.0978. However, the pair faces the upper trend line of the long term ascending channel pattern. On Wednesday the trend line was located at the 1.0958 mark. Due to that reason a bounce off from the resistance level is possible. In that case the pair would retreat back to the 1.0880 level, where close by the weekly R2 and the monthly R1 are residing.
Daily chart
Hourly chart
Read More: Technical AnalysisMarket sentiment strongly bearish
Traders remain bearish on the pair, as 60% of open positions are short. In addition, 53% of trader set up orders are to sell the Euro.
OANDA traders are bearish, as 64.92% of trader open positions are short on Wednesday, compared to 62.87% previously. Moreover, SAXO bank clients also remain bearish, as 66.61% of open positions are short, compared to the 63.91% positions on Tuesday.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.08 by the end of July
Traders, who were questioned on their longer-term views on EUR/USD between March 26 and April 26 expect, on average, the currency pair to trade around 1.08 in the second half of July. In general, 51% (+2%) of participants believe the exchange rate will be above 1.08 in ninety days, and 21% see it above 1.12. In the meantime, 7% of those surveyed reckon the pair will be at parity or below.