- SWFX market sentiment is 51% bearish
- Pending commands in the 100-pip range 53% long
- Pair dropped to the 1.12 level on Tuesday
- Aggregate daily technical indicators bet EUR/USD will appreciate
- Economic events to watch over the next 24 hours: US Empire State Manufacturing index (June); US PPI Ex Food & Energy (May); US PPI (May); US Capacity Utilization (May); US Industrial Production (May); Bundesbank's President's Weidmann's Speech; ECB's Constancio's Speech; US Long-term TIC Net (April)
For the previous month, Germany's trade balance advanced unexpectedly. According to the Federal Statistics office, Germany recorded a headline of 25.6bn euros for April from 21.8bn euros in April 2015. The seasonally-adjusted surplus increased to 24bn euros from a revised 23.7bn euros in May, compared with an expected decline for the month. Moreover, the adjusted surplus was at a record high and will resume supporting the single European currency. The overall German current account surplus expanded to 93.9 billion euros for the first quarter of 2016 from 79.8 billion euros the previous year despite a slight widening in the services deficit. Meanwhile, analysts had expected Germany's trade balance to plunge to 23bn euros last month. Meanwhile, German exports went up by 3.8% in April compared to the same month a year ago, while imports remained nearly unchanged and as a result have led to a wider trade balance for Europe's most powerful economy. Overall, German exporters have strong global position on competitiveness grounds, which will continue to underpin the trade surplus in the short term. Moreover, the surplus will also make it challenging for the ECB to push the Euro substantially weaker even taking into account the quantitative easing programme.
For the previous month, Germany's trade balance advanced unexpectedly. According to the Federal Statistics office, Germany recorded a headline of 25.6bn euros for April from 21.8bn euros in April 2015. The seasonally-adjusted surplus increased to 24bn euros from a revised 23.7bn euros in May, compared with an expected decline for the month. Moreover, the adjusted surplus was at a record high and will resume supporting the single European currency. The overall German current account surplus expanded to 93.9 billion euros for the first quarter of 2016 from 79.8 billion euros the previous year despite a slight widening in the services deficit. Meanwhile, analysts had expected Germany's trade balance to plunge to 23bn euros last month. Meanwhile, German exports went up by 3.8% in April compared to the same month a year ago, while imports remained nearly unchanged and as a result have led to a wider trade balance for Europe's most powerful economy. Overall, German exporters have strong global position on competitiveness grounds, which will continue to underpin the trade surplus in the short term. Moreover, the surplus will also make it challenging for the ECB to push the Euro substantially weaker even taking into account the quantitative easing programme.
Upcoming fundamentals: Massive US data and European bank speakers
On Wednesday there are a lot of data releases coming from the US. First of all will be the Empire State Manufacturing index together with various PPI indices, which vary from simple PPI monthly change to year-to-year PPI Ex Food and Energy, at 12:30 GMT. Secondly at 13:15 GMT US Capacity Utilization index and the industrial production monthly changes will be released. Later on the German Bundesbank's President Weidmann will give a speech at 14:00. Afterwards, at 14:30 ECB's Constancio will give a speech. Last but not least, at 20:00 GMT Long-term and Total TIC Net data will be released for the US.
EUR/USD falls to 1.12 level on Tuesday
Daily chart: Ignoring Monday's gains, the European currency depreciated against the US Dollar on Tuesday and fell to the level of 1.12. However, on Wednesday morning the currency pair has rebounded from the weekly S1 at 1.1192, and it has appreciated a little bit. At the moment, the exchange rate is at 1.1208. If it rebounds from the support, the pair could move north to the weekly pivot point at 1.1282. Although, in such case it would also have to pass the 100 and 20-day SMAs, which are respectively located at 1.1219 and 1.1262.Daily chart
Hourly chart: The hourly chart shows, that the Euro bounced off the combined resistance provided by the 200-hour SMA and weekly PP around 1.1304 was pushing the pair down for the second half of Monday's session. However, it did not move past the support provided by the monthly PP and 20 and 55-hour SMAs around the level of 1.1282. The currency exchange rate went down around 6:00 GMT, when the SMAs moved below the monthly PP, and with it the common support weakened, which made the pair drop to the monthly S1 at 1.1192.
Hourly chart
SWFX traders decrease bearish sentiment
OANDA trader bearish sentiment has decreased compared to Tuesday, as 55.56% of open positions are short. In addition, SAXO Bank clients have also decreased their bearish stance, as their open short positions are now at 61.60% compared to 64.78% yesterday.
Spreads (avg,pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade at 1.12 by August
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between May 15 and June 15 expect, on average, the currency pair around 1.12 by the end of August. Though 43% of participants believe the exchange rate will be generally below 1.12 in ninety days, with 20% alone seeing it below 1.08. Alongside, only 19% of those surveyed reckon the price will trade in the range between 1.12 and 1.18 on August 31.Dukascopy Community members are bearish on this week's perspectives of EUR/USD
61.1% of the Dukascopy Community members are expecting a surge in the value of the Euro against the Greenback by the end of this working week. The median estimate for June 17 stands slightly at 1.134. Among traders, nuonrg suggests that "The Euro closed the week below 4h momentum. We might get a squeeze lower into the daily trend line before trying higher prices".
At the same time, trader megajorko is bearish stating that "After returning to previous levels and breaking all supports possible the pair is again in bearish mode with possibility to reach new lows on Fed interest increase. The start of the big spike up was due to lower than expected NFP number but with this effect fading out I believe that 1.14 was the top for the pair for a long time".