- SWFX market sentiment is 60% short
- Pending orders in the 100-pip range are 56% to sell
- US employment data on Friday
The first full review of the EUR/USD situation of 2019 is set to outline the situation. In general, the currency exchange rate has surged up to the 1.1500 mark. Moreover, from both a technical and fundamental perspective the rate is expected to surge in the first months of 2019.
The European Single Currency depreciated against the US Dollar, following the US FOMC Meeting Minutes release on Wednesday at 19:00 GMT. The EUR/USD exchange currency rate lost 34 pips or 0.30% during a minute, right after the release. The European Single Currency continued trading at the 1.1370 area against the US Dollar.
The Federal Reserve releases US FOMC Meeting Minutes where fed officials provide in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates.
The key highlight from the official statement, "Fed raises target interest rate to 2.25-2.50 pct, reduces expected hikes for 2019 to two from three."
US and Canadian employment data on Friday
The first week of the year will have a notable data release occurring. Namely, on Friday at 13:30 GMT the Canadian and US statisticians are expected to publish their employment data.In both countries the Average Earnings, Change in Employment in real numbers and the official Unemployment Rate will be published. This data release has caused an increase of volatility on the USD/CAD from 30 to 70 base points.
The data release will be covered during a live stream on the Dukascopy Webinars YouTube channel. The event will start at 13:20 GMT.
EUR/USD daily review
The EUR/USD first daily review reveals that the currency exchange rate was standing at a strong technical support cluster at 1.1420. The cluster was made up of the 100 and 200-hour simple moving averages and the weekly pivot point.The rate is either going to clearly bounce off the mentioned support clusters and surge up to the 55-hour SMA at 1.1450 and afterwards the 1.1460 level where the 50.00% Fibonacci retracement level is located at.
On the other hand, the support cluster can be broken. In that case the rate will immediately test the technical support of the monthly pivot point at 1.1408 level.
Hourly Chart
On the daily chart the recent surge has been charted in an ascending pattern.
In general, on a larger scale, the rate could reach for the upper trend line of the most dominant descending channel pattern by surging during the next couple of months.
Such a forecast is consistent with the fact that the European Central Bank intends to tighten their monetary policy next year. Meanwhile, the US Federal Reserve is signalling that their monetary tightening will be less than it was planned previously.
Daily chart
On Wednesday, traders were shorting the EUR/USD in 60% of all cases. Namely, six out of ten traders on the Swiss Foreign Exchange had open short not long positions.
Meanwhile, trader pending orders in the 100-pip range were set mostly to sell the pair. 54% of pending orders were set to sell.
In general, traders were riding the retracement downwards after the rate's recent surge. Moreover, traders were ready to open more short positions.