- Bulls fail to escape minority, their share up from 43% to 45%
- Pending orders became bearish towards Euro in 52% of all cases
- Trading between 1.13 and 1.14 implies a neutral outlook for EUR/USD
- Five out of eight daily technical studies are set to buy the single European currency vs US Dollar
- Economic events to watch in the next 24 hours: Euro zone Current Account (Aug); US Housing Starts and Building Permits (Sep); FOMC Members Powell and Dudley Speak; Fed Chair Yellen Speaks
© Dukascopy Bank SA
French President Francois Hollande said France's economy would expand 1.1% this year, compared with the previous government forecast of 1%. Yet, the pace of growth would be insufficient to have a significant effect on the nation's unemployment rate. Moreover, the growth would be slower compared with other countries in the Euro bloc, due to the construction sector, where both housing and public works stalled. Hollande added the government will also reform labour laws to make the labour market more flexible.
At the same time, the official statistics agency INSEE downgraded its economic outlook this year to 1.1% from its previous estimate of 1.2%. For the third quarter INSEE expected France's economic output to grow 0.2% and 0.4% in the final three months of the year. In late September, Moody's Investors Service revised downwards the country's government bond ratings by one notch to Aa2 from Aa1. The outlook on the ratings remained stable.
Watch More: Dukascopy TV
Upcoming fundamentals: Fed's Yellen, Dudley and Powell to speak Tuesday
Both the President of the New York Fed William Dudley and Fed Governor Jerome Powell are going to deliver speeches and openings remarks at the US Treasury Market Conference today. As they are the voting members of the FOMC this year, the market is likely to pay particular attention to the language they use to talk about the upcoming tightening cycle of the Federal Reserve. The time of speeches is set at 13:00 and 13:15 GMT. Meanwhile, the Fed Chair Janet Yellen will speak in Washington DC later in the day.
Read More: Fundamental Analysis
EUR/USD in limbo around 1.1330
Even though daily technical indicators are pointing strongly to the north for now, the price of the Euro against the US currency is unlikely to move noticeably higher in the short term. There is a considerable resistance area located just below the 1.14 mark, created by the weekly pivot point and monthly R1. On the other hand, EUR/USD should be supported by demand at 1.13 (20-day SMA; weekly S1). Our outlook will stay largely neutral, as long as the pair keeps hovering inside this 100-pip technical levels-free zone.Daily chart
© Dukascopy Bank SA
From the perspective of the one-hour chart, the bearish case seems to be much more likely for the time being. There is a bearish trend being established, meaning that losses may extend even lower. Moreover, the 200-hour SMA was breached to the downside for the first time since Oct 6.
Hourly chart
© Dukascopy Bank SA
Read More: Technical Analysis
SWFX 100-pip pending orders swing between gains and losses
Among clients of OANDA and SAXO Bank, the sentiment remains largely negative towards the Euro. With 62% of OANDA open positions being bearish, the share of short trades at SAXO Bank stays even higher at 68% this Tuesday.
Spreads (avg,pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade at 1.14 by January 2016
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Sep 20 and Oct 20 expect, on average, to see the currency pair around 1.14 by the end of January. The majority of participants, namely 53% of them, believe the exchange rate will be generally below this mark in ninety days, with 34% alone seeing it below 1.10. Alongside, 27% of those surveyed reckon the price will trade in the range between 1.14 and 1.20 by the end of January 2016. © Dukascopy Bank SA