The Euro is reaching long unseen heights against the US Dollar on Tuesday. However, the currency exchange rate is facing strong resistance levels from a technical perspective. Meanwhile, there is a significant number of data releases scheduled in the US, which might reverse the direction or enforce the already occurring decline of the US Dollar.
Manufacturing activity in the New York state deteriorated unexpectedly in May, falling into the negative territory for the first time since October, official figures revealed. The regional Federal Reserve reported on Monday that its Empire State Manufacturing Index came in at –1.0 in the reported month, following the preceding month's 5.2 points. Meanwhile, market analysts anticipated a climb to 7.2 in May. The drop may be a sign of an activity slowdown in the manufacturing sector.
Upcoming events: Loads of US Data
EUR/USD reaches above 1.10 mark
The common European currency continued to surge against the US Dollar on Tuesday morning. The currency exchange rate reached above the 1.10 mark and was set to score additional gains. The pair is most likely going to reach the resistance put up by the weekly R1, which is located at the 1.1025 level. Due to the fact that the first weekly resistance is strengthened by three more additional levels of significance, it is highly unlikely that the rate will pass the resistance cluster, which is located from 1.1025 to 1.1057. The rate is more likely to retreat after a few failed attempts.
Daily chart
Hourly chart
Read More: Technical AnalysisMarket sentiment strongly bearish
SWFX market sentiment remains bearish, as 63% of open positions are short, and 61% of trader set up orders are to sell the Euro.
OANDA traders remain bearish, as 65.44% of trader open positions are short on Tuesday, compared to 61.49% previously. In addition, SAXO bank clients are also bearish, as 64.85% of open positions are short, compared to the 59.73% positions on Monday.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.10 in August
Traders, who were questioned on their longer-term views on EUR/USD between April 16 and today expect, on average, the currency pair to trade around 1.10 in August. In general, 48% (-1%) of participants believe the exchange rate will be above 1.10 in ninety days, and 35% see it above 1.12. In the meantime, only 2% of those surveyed reckon the pair will be at parity or below.