- SWFX market sentiment stands at equilibrium
- 58% of pending orders in 100-pip range are to SELL the Euro
- Likely downside target at 1.2320
- Important for today: ECB Monetary Policy Meeting Accounts, US Unemployment Claims, German Buba President Weidmann to speak
The common European currency continues to move in a short-term ascending channel. This pattern is expected to surrender soon.
The Greenback weakened against the Eurozone's single currency, following the US Consumer Price Index data on Wednesday. The EUR/ USD currency gained only two pips, or 0.01%, to continue fluctuating in the 1.2386 area.
The Bureau of Labor Statistics revealed lower-than-expected data in Consumer Price Index in March. On month-to-month basis CPI showed its first decrease in 10 months by 0.1%, compared to a growth of 0.2% in the prior month. However, economists had forecast it to stay unchanged, the drop was caused by the decline in gasoline costs. Moreover, rising prices for rental accommodation and healthcare continued to put pressure on underlying inflation.
ECB in focus
The European Central Bank will release its Monetary Policy Meeting Accounts at 1130GMT. In addition, the President of the Deutsche Bundesbank Jens Weidmann is due to deliver a speech "A spirit of optimism in Europe – guidelines for a crisis-proof monetary union" at 1600GMT.
Meanwhile, the only fundamental event from the United States in this session is the weekly Unemployment Claims released at 1230GMT.
EUR/USD remains unchanged
Despite high volatility, the common European currency remained stable against the Greenback on Wednesday. The general trading range for the pair was not significant, as it was fluctuating between the 23.60% Fibo at 1.2360 and the 1.2380 mark.Given that technical indicators have already edged lower from their high positions, the Euro is likely to surrender under the bearish pressure. In addition, this currency has likewise failed to push towards the senior channel and the weekly R2 circa 1.2415.
In order to confirm this decline, the pair still has to overcome the strong support of the 55-hour SMA, the 23.60% Fibo and the weekly R1 near 1.2360. A successful breakout should send the pair towards the 1.2320 level, while a failure to do so is likely to result in a test of the senior channel.
Hourly Chart
The common European currency managed to breach the 55-day SMA and the prevailing senior channel late in March. This factor together with bearish technical indicators add some ground to the assumption that the pair is likely to edge lower during this week.
The nearest support cluster is set by the monthly S1, the weekly S2, the 100-hour SMA and the 50.00% Fibonacci retracement near 1.2150.
Daily Chart
Bearish sentiment grows stronger
The SWFX market sentiment for EUR/USD has once again returned to equilibrium.
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 53% bullish.
The bearish sentiment of OANDA traders stands at 60% (+5%). Saxo Bank clients share the same sentiment with 63% of open positions being short (+1%).
Spreads (avg, pip) / Trading volume / Volatility