- SWFX market sentiment is 61% bearish (-1%)
- 63% of pending orders in 100-pip range are to SELL the Euro
- Daily high at 1.2380
- Upcoming events: ECB Monetary Policy Meeting Accounts, US Unemployment Claims, FOMC Member Bostic to speak
The US National Association of Realtors reported that in January the existing home sales slumped for the second month in a row. Contrary to economists' expectations for the number to have surged 0.9%, existing home sales declined 3.2% in the reported month.
It was the largest drop on year-to-year basis over the three-year period. Yet, the demand for housing is increasing due to the boosting labour market, which results as a shortage of buying opportunities for some potential first-time buyers.
ECB in focus
The main event that could introduce some volatility in the market today is the Monetary Policy Meeting Accounts released by the European Central Bank at 1230GMT.
Meanwhile, the US is to publish its weekly unemployment claims at 1330GMT, while the President of the Federal Bank of Atlanta Raphael Bostic is due to speak at the Banking Outlook Conference at 1710GMT.
EUR/USD breaches senior channel
The Euro was trading with low volatility during the first part of Wednesday. Higher volatility was introduced later in the evening when the FOMC released its meeting minutes. The Fed praised the strength of economic growth, while expressing concerns over missed inflation targets.This statement resulted in an immediate upward pressure on the pair, which was soon overrun by the stronger Greenback. As a result, the session ended with a 56 pip decline in price. Given that the prevailing senior channel was breach mid-session, traders might see a decline in the medium term.
However, in terms of the following session, the Euro is expected to bounce off the junior channel and the weekly S1 at 1.2240 to begin a brief period of recovery. Upside target for today—the 1.2350/1.2400 area.
Hourly Chart
It seems that the Euro might finally be ready to abandon its high position against the Greenback and move towards the bottom boundary of the prevailing 1,5-year channel, the 55-day SMA and the 50.0% Fibo retracement circa 1.22 during the following weeks.
Daily Chart
Traders are bearish
The number of short positions of the EUR/USD exchange rate is 61% in this session (-1%).
The outlook for the two currencies against the rest of the traded financial instruments is as follows: the Euro is 67% bearish and the US Dollar is 59% bullish.
OANDA traders remain bearish in this session, as 58% of open positions, compared to 69% on the previous session. The bearish sentiment of Saxo Bank clients stands at 57% short positions (-2%).
Spreads (avg, pip) / Trading volume / Volatility