- SWFX market sentiment is 58% bearish
- 57% of pending orders in 100-pip range are set to BUY
- 55% of traders are bullish on the Dollar
- Upcoming Events: US Prelim GDP, Crude Oil Inventories and Fed Chair Yellen Testimony
In line with expectations, the release of better than expected American macro data as well as progress made on tax reform adoption led to strong appreciation of the buck. As the pair made a rebound near the 50% Fibo located at 1.1825, the surge is expected to resume. However, a short retreat might be triggered once the rate reaches the 1.1890 level.
The US Dollar strengthened against the Japanese Yen on a strong enhancement in the US consumer confidence. The USD/JPY exchange rate increased 8 pips or 0.07% to reveal high volatility on a trading session, targeting the 111.65 area.
The Conference Board revealed that the Consumer Confidence Index for the US rose to the 129.5 mark in November, reaching the highest level in 17 years. The strong increase mostly reflected households' optimistic perceptions of the job market. Economists noted that bullish consumers in conjunction with tight job market were reasonable grounds for the Fed to make the interest rate hike in December, despite worries over persistently low consumer inflation growth.
US GDP release
Although there might appear some volatility during the Q&A session between Mrs Yellen and the Joint Economic Committee of Congress, the main event of the day is expected to happen earlier, at 13:30 GMT when the Bureau of Economic Analysis will publish the first outlook on the US quarterly GDP.
EUR/USD falls to 1.1836 amid progress on tax reform
In line with forecasts, an improvement in consumers' sentiment dragged the pair to the weekly PP at 1.1864, while the subsequent news that two hesitating senators agreed to join other Republicans to support tax reform pushed the pair even further to the monthly R1 at 1.1826. As this barrier is located slightly above the bottom boundary of an ascending channel and is additionally supported by the 200-hour SMA, the pair is expected to make a fully-fledged rebound and start surging back to the 1.1910 and then 1.1960 levels. However, a resistance posed by the weekly PP as well as concentration of the 55- and 100-hour SMAs near the 61.8% retracement level at 1.1890 suggests that the rate is likely to make one more turnaround especially if it matches with release of info on the US Prelim GDP.
Hourly Chart
The preceding trading session returned the pair back to the bottom boundary of the currently active ascending channel. As it was additionally backed by the monthly R1 and the 50% Fibonacci retracement level, the pair is expected to resume the surge at least until the 1.1885 mark.
Daily Chart
Market sentiment is bearish
In result of the previous trading session the bearish market sentiment slightly decreased, as 58% 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 65% bearish and the Dollar is 55% bullish.
Traders of OANDA remain bearish, as 59% (-5%) of open positions are short. Meanwhile, SAXO are bearish on this currency pair with 57% (-1%) of open short positions.
Spreads (avg, pip) / Trading volume / Volatility