The Euro has stopped the surge against the US Dollar. However, it also has a strong enough support to not give up a lot of ground. The situation is tricky. Market participants are about to watch levels of significance for various clues on the short term direction of the currency exchange rate.
Crude oil inventories in the United States dropped less than expected last week, a weekly report showed on Wednesday. The Energy Information Administration reported US crude stockpiles fell 1.8M barrels in the week ending May 12, following the preceding week's drop of 5.2M barrels and falling behind expectations for a 2.5M-barrel decline. US production fell 9K barrels per day to 9.305M barrels per day, the first drop in 13 weeks. Nevertheless, the production levels remained below the EIA's 2017 production target of 9.31M barrels per day.
Upcoming events: Data and Draghi
Euro encounters resistance
The EUR/USD currency pair seems to have encountered the resistance of a medium term ascending channel pattern, which broke through the previously active long term channel up. It is most likely that the pair will retreat down to the support of the weekly R2, which is located at the 1.1115 mark. However, it is yet to be seen whether that support is passed. Although, if that occurs the currency pair could retreat back to the support cluster near the 1.1050 mark. On the other hand the pair might make an attempt to break the resistance cluster near the 1.1190 level.
Daily chart
Hourly chart
Read More: Technical AnalysisMarket sentiment strongly bearish
SWFX traders continue to short the pair, as 61% of open positions are bearish. However, 53% of trader set up orders are to buy the Euro.
OANDA traders remain bearish, as 69.19% of trader open positions are short on Thursday, compared to 67.75% previously. In addition, SAXO bank clients are also bearish, as 64.29% of open positions are short, compared to the 62.92% positions on Wednesday.
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 18 and today expect, on average, the currency pair to trade around 1.10 in August. In general, 53% (+2%) of participants believe the exchange rate will be above 1.10 in ninety days, and 39% (+1%) see it above 1.12. In the meantime, finally none think that parity is an option.