The long term ascending channel has been broken. The currency exchange rate is scoring new gains, as it reaches above the 1.11 mark. It seems that the recent events, which were inducing a risk off sentiment have disappeared completely and Europe stands firm without losing its ground prior to the European election season.
US homebuilding activity dropped in April; however, revisions of the preceding month's readings suggested that homebuilding activity continued improving. The Census Bureau reported on Tuesday that housing starts declined 2.6% to a seasonally adjusted annual pace of 1.17M units last month, following March's upwardly revised 1.28M-unit pace and falling behind expectations for a 3.7% rise to a 1.26M-unit pace.
Upcoming events: Only crude oil
EUR/USD attempts to climb higher
Tuesday ended with the EUR/USD currency pair breaching the ascending channel's resistance line with ease, opening the door for more bullish potential. However, the Euro does have a rather tough resistance area on its path, represented by the upper Bollinger band, the weekly R2 and the 61.80% Fibo, while the second supply cluster lies around 1.12. On the other hand, we should not rule out the possibility of a bearish correction, which would preserve the channel pattern, as technical indicators are giving mixed signals today.
Daily chart
Hourly chart
Read More: Technical AnalysisMarket sentiment strongly bearish
There are 62% of traders holding short positions today, compared to 63% on Tuesday. At the same time, all pending orders became equally divided between the buy and the sell ones.
OANDA traders remain bearish, as 67.75% of trader open positions are short on Wednesday, compared to 65.44% previously. In addition, SAXO bank clients are also bearish, as 62.92% of open positions are short, compared to the 64.58% positions on Tuesday.
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 17 and today expect, on average, the currency pair to trade around 1.10 in August. In general, 51% (+3%) of participants believe the exchange rate will be above 1.10 in ninety days, and 38% (+3%) see it above 1.12. In the meantime, finally none think that parity is an option.