- SWFX market sentiment is 54% bearish
- 73% of pending orders in 100-pip range are set to SELL
- 50% of traders are bullish on the Dollar
- Upcoming Events: New Fed Chair announcement, Unemployment Claims, Prelim Nonfarm Productivity, Prelim Unit Labor Costs
Although there was a release of various fundamental data, the pair did not make any major advances yesterday. This indifference not only proves that the FOMC decision was not unexpected, but also shows that markets are mainly anticipating the upcoming new Fed Chair announcement.
The Euro fell slightly against the US Dollar, after the Federal Reserve announced its interest rate decision. Following the release, EUR/USD was 12 base points down touching the 1.1615 mark. However, the pair managed to climb to the 1.1660 area on early Thursday ahead of the row of European economic reports.
The Federal Reserve announced that it kept key interest rates unchanged and pointed to strong US economic expansion and better labour market conditions, as recent hurricanes had only short-term impact on economic activity. The Bank's policymakers kept their encouraging stance, when acknowledging that consumer price growth was still soft, but did not lowered their evaluations of pricing expectations.
Fed Chair announcement in focus
Although there are some data releases planned for today, but the main event is expected to happen, as soon as President Trump will announce the new Fed Chair. Experts believe that Governor Powell, if chosen, will be more dovish and his policy will stay on the same trajectory with Janet Yellen. In the meantime, election of Professor Taylor is expected to lead to more significant changes in the long run.
EUR/USD remains undecided after FOMC meeting
Contrary to expectations, none of the yesterday's fundamental events led to notable price movements. In other words, the currency rate remained in a limbo between resistance at 1.1658 and support near 1.1610 that formed three days ago. The reason behind such weak reaction might be attributed to quite expected result of the FOMC meeting, which underlined solid economic growth, and anticipation of announcement of the next Fed Chair. Once this happens, the balance between bulls and bears will be distorted and the pair is likely to make a long awaited breakout. On the other hand, it already feels the pressure from the 55- and 100-hour SMAs, which are trying to push it towards the weekly PP at 1.1674. However, there are also signs of formation of a junior ascending channel. In that case, a rebound is expected to follow.
Hourly Chart
The four-day horizontal movement points out that that the pair is actually fluctuating in a minor flag formation. If this assumption is correct, then the exchange rate is likely to make a breakout in the southern direction and try to reach the bottom trend-line of a dominant descending channel. However, the outcome will significantly depend on today's new Fed Chair pick.
Daily Chart
Traders remain bearish
In result of the previous trading session the bearish market sentiment stayed unchanged, as 54% of open positions are short now.
In the meantime, the outlook for the two currencies against the rest of the traded financial instruments is the following: the Euro is 61% bearish and the Dollar is 50% bullish.
Traders of OANDA remain bearish, as 62% (-1%) of open positions are short. Meanwhile, SAXO are neutrally bearish on this currency pair with 52% (+1%) of open short positions.
Spreads (avg, pip) / Trading volume / Volatility