- SWFX market sentiment is 59% bearish (-2%)
- 58% of pending orders in 100-pip range are to SELL the Euro
- Strong northern barrier circa 1.2380
- Upcoming events: ECB President Draghi and FOMC Member Quarles to speak, US New Home Sales
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.
Draghi to testify
This week will start with the ECB President Mario Draghi who is to testify on monetary policy and the inflation outlook before the European Parliament Economic and Monetary Affairs Committee at 1400GMT.
The US Census Bureau will release data on new home sales for the previous month at 1500GMT, while the Federal Reserve Governor Randal Quarles is due to deliver a speech "An Assessment of the US Economy" at 2015GMT.
EUR/USD strongly bullish on Monday morning
Lack of fundamentals on Friday resulted in the Euro trading sideways against the US Dollar. Its movement was guided by the 55-hour SMA until an upside breakout occurred early in the Asian session. This strong upside momentum began when the rate reversed from the monthly PP and the bottom boundary of a four-month channel near 1.2285.Given that the Euro also surpassed the 100-hour SMA circa 1.2320, it might still push higher within this session. A possible upside target could be either the 23.60% Fibo retracement or the 200-hour SMA at 1.2360 and 1.2375, respectively.
The testimony of the ECB President Draghi at 1400GMT could introduce some volatility in the market. In case downside risks prevail, a subsequent fall is not expected to exceed the 1.2280 mark.
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 59% in this session (-2%).
The outlook for the two currencies against the rest of the traded financial instruments is as follows: the Euro is 64% bearish and the US Dollar is 58% bullish.
OANDA traders remain bearish in this session, as 52% of open positions, compared to 55% on the previous session. The bearish sentiment of Saxo Bank clients stands at 57% short positions (-1%).
Spreads (avg, pip) / Trading volume / Volatility