- SWFX market sentiment is 53% bearish
- 54% of pending orders in 100-pip range are to SELL the Euro
- Downside potential until 1.2330
- Upcoming data releases: Euro zone's Final CPI y/y, FOMC Members Dudley and Quarles to speak
The breaching of the 55-hour SMA is likely to be followed by bearish momentum.
The Greenback strengthened against the Eurozone's single currency, following the US Building Permits data report on Tuesday. The EUR/USD currency pair lost only 3 pips, or 0.03%.
The Census Bureau released the Building Permits data that came out slightly better-than-expected and instead of the forecast of 1.33M, the residential building permits grew by 1.35M in the period of March.
Building Permits rose by 2.5% annually, reaching the 1.354M growth pace, thus signaling how much of a construction is in the process. Moreover, single-family house building has retained close to the utmost levels ever since the recession began.
No significant data releases
Wednesday's trading session will start with the Final CPI for the Euro zone released at 0830GMT.
Meanwhile, two speeches by FOMC members are likewise occurring today. The President of the Federal Bank of New York William Dudley is due to speak about the economic outlook and monetary policy at 1915GMT, while the Federal Reserve Governor Randal Quarles is due to speak at the Bretton Woods Committee Annual Meeting at 2015GMT.
EUR/USD near 55-hour SMA
On Tuesday, the common European currency once again failed to overcome the psychological 1.24 mark which has worked as a strong resistance this month. Being pressured by the weekly R1, the pair reversed from this level and was pushed back down to the 55– and 100-hour SMAs and a junior channel line circa 1.2350.The Euro could go for a re-test of the senior pattern during the first part of the day, as the 55-hour SMA is likely to hinder an immediate breakout south. However, given the pair's ability to accelerate during the past trading sessions, the bearish sentiment should eventually take the dominant hand.
A significant fall is not expected to occur today due to the 100– and 200-hour SMAs and the weekly and monthly PPs located nearby in the 1.2350/1.2300 area.
Hourly Chart
Despite breaching the 55-hour SMA late in March, the Euro managed to reverse from the long-term channel and return back to this line. However, it is still expected that the pair ends this correction north and targets the 1.2150 area this week where the monthly S1, the 100-hour SMA and the 50.00% Fibonacci retracement are located.
Daily Chart
Bearish sentiment grows stronger
The SWFX market sentiment for EUR/USD is 53% bearish.
The outlook for the two currencies against the rest of the traded financial instruments is as follows: the Euro is 58% bearish and the US Dollar is 54% bullish.
The bearish sentiment of OANDA traders has increased to 60% (+2%). Saxo Bank clients share the same sentiment with 63% of open positions being short.
Spreads (avg, pip) / Trading volume / Volatility