- SWFX market sentiment is 57% bearish
- 64% of pending orders in 100-pip range are set to SELL
- 60% of traders remain bullish on the Dollar
- Upcoming Events: German ZEW Economic Sentiment, US Building Permits, Current Account, Housing Starts, Import Prices
As it was expected, the currency pair did not make any notable moves yesterday because of the pressure from various moving averages as well as the weekly PP. In the first half of the day the pair is likely to try to bypass a resistance that is located between the 1.1985 and 1.1995 levels. A release of various fundamental data today is expected to help the Euro to achieve this goal and eventually reach the weekly R1 at 1.2039.
The Euro added only 3 base points against the US Dollar after the reports on the European consumer inflation were published. Other data also failed to determine the leading sentiment in EUR/USD, while the currency pair entered into a symmetrical triangle at short, trading in a narrow range between the 1.194 and 1.196 levels.
The Eurostat released its final inflation data for the month of August, showing that the headline Index rose 1.5% in line with estimates, while the core figure also matched forecasts with a 1.2% increase. The Euro is set to remain strong, while the only occasion able to undermine the European single currency's stability is expected to be a speculation ahead of the Germany's Federal Election on September 24.
In focus: American housing data
At 12:30 GMT trades are advised to follow the latest update on the US housing market. Although the Building Permits and the Housing Starts do not arouse very high interest among swing traders, it still remains important information about the state of American economy that allows evaluating an impact of the Donald Trump's presidency.
However, a little bit earlier at 9:00 GMT there will also be a quite important release. Even though the ZEW's Economic Sentiment does not cover all Europe it still remains an important economic data, as Germany represents the driving power of the whole European continent.
EUR/USD tries to break above 1.1995
As it was forecasted, the currency exchange rate failed to make any substantial moves yesterday. To be precise, bears tried to push the pair to the bottom at least three times but all these attempts were neutralized by a combination of the 55- and 100-hour SMAs.
Accordingly, today it is testing a resistance that is located in the area between the 1.1985 and 1.1995 levels. A number of technical suggests that this attempt is going to fail, as the pair is overbought.
On the other hand, the rate experiences constant pressure from the above moving averages, which now became also strengthened by the 200-hour SMA. From this perspective, the surge towards the weekly R1 at 1.2039 seems a more likely scenario.
In addition, if the German ZEW Economic Sentiment will justify expectations that could give the Euro a necessary impulse to reach the above target.
Hourly Chart
In result of the yesterday's horizontal movement, the currency pair broke though the upper edge of a junior descending triangle, thus confirming an earlier rebound from the monthly PP at 1.1881. Basically, now the pair does not face any notable resistance barriers up until the monthly R1, which is located at the 1.2099 level. Hence, the surge is likely to continue.
Daily Chart
Traders still bearish on the pair
The SWFX market sentiment remained unchanged since yesterday and now is 57% bearish. In the meantime, the outlook for the two currencies against the rest of the traded financial instruments is as follows. Euro is 61% bearish, while for the Dollar 60% bullish.
Traders of OANDA remain bearish, as 63% of open positions are short. Meanwhile, SAXO are also bearish on this currency pair with 59% of open short positions.
Spreads (avg, pip) / Trading volume / Volatility