On Wednesday morning the EUR/USD pair remained in a short term ascending channel, which kept the rate positioned between two notable levels of significance. The reason for such a position is the fact that the markets are expecting fundamental data from both the EU and the US. Moreover, the US data will also have the Federal Funds Rate announcement later in the day.
The Purchasing Managers' Index for the US manufacturing sector grew less than analysts estimated. According to the Institute for Supply Management, the PMI lost 2.4% compared to the previous month and tumbled to 54.8%, while experts anticipated only a slight decrease of 0.6%. Although in April the PMI rose at the slowest pace this year so far, it still remained above the 12-month average of 53.6%. The ISM report showed that the New Orders, Employment and Supplier Deliveries Indices dropped 7.0%, 6.9% and 0.8%, accordingly. Meanwhile, both Inventories and Prices Indices posted a 2% advance, which indicated that manufacturing companies stockpiled more raw materials than in the previous month and their costs increased.
Upcoming events: FOMC in focus
EUR/USD remains above 1.09 mark
On Wednesday morning the common European currency had slightly retreated against the US Dollar, as the currency exchange rate continued to trade above the 1.09 mark. The reason for the almost flat trading was the fact that the markets are expecting fundamental data in the form of the EU GDP and the US Federal Funds Rate later in the day. Meanwhile, from a technical perspective the currency pair remains below a strong resistance cluster, which surrounds the upper trend line of a long term ascending channel.
Daily chart
Hourly chart
Read More: Technical AnalysisMarket sentiment strongly bearish
SWFX traders continue to short the Euro, as 61% of open positions are bearish. Meanwhile, 52% of trader set up orders are to sell.
OANDA traders remain bearish, as 64.28% of trader open positions are short on Wednesday, compared to 62.39% previously. Moreover, SAXO bank clients also remain bearish, as 64.76% of open positions are short, compared to the 63.32% positions on Tuesday.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.085 in August
Traders, who were questioned on their longer-term views on EUR/USD between April 3 and today expect, on average, the currency pair to trade around 1.085 in early August. In general, 61% (+3%) of participants believe the exchange rate will be above 1.08 in ninety days, and 27% (+4%) see it above 1.12. In the meantime, 7% (+1%) of those surveyed reckon the pair will be at parity or below.