- SWFX market sentiment is neutral
- Trader pending orders are 58% to sell
- Pair opened Friday's session at 1.0576
- Upcoming Events: US Average Hourly Earnings; US Non-Farm Employment Change; US Unemployment Rate
As markets expected, the European Central Bank left its monetary policy unchanged at its meeting on Thursday, saying it would continue monitoring inflation. Regarding non-standard monetary policy measures, the Governing Council confirmed that the monthly asset purchases of 80 billion euros would be reduced to 60 billion euros starting from next month. Policymakers also voted to keep the main refinancing rate at 0% and the overnight deposit rate at -0.4%. The ECB said that its key interest rates would likely remain at present or lower levels for an extended period of time, and well past the horizon of our net asset purchases. After two years of the ECB's QE programme inflation accelerated well above the Bank's initial goal, signaling that the monetary stimulus should be reduced.
However, the ECB President Mario Draghi pointed out that the recent acceleration in prices was mainly driven by a rebound in energy prices. Draghi also highlighted that risks related to the upcoming European elections had the potential of slowing the economic recovery in the region. Nevertheless, the ECB raised its 2017 inflation projection to 1.7% from 1.3% in December, adding that the expected pick-up would probably be temporary. Meanwhile, GDP growth projections were revised up to 1.8% from 1.7% in December
Watch More: Dukascopy TV
Upcoming events: US labor data
During the second part of Friday's trading session, at 13:30 GMT, there will be a package of fundamental data released in the US, which will affect the strength of the US Dollar in the financial markets. The release will consist of US Average Hourly Earnings data, US Non-Farm Employment Change and the US Unemployment Rate. The data release will be covered by the Dukascopy research team on the live webinar platform of the bank.
Read More: Fundamental Analysis
EUR/USD rebounds and trades near 1.06
Daily Chart: The common European currency traded near the 1.06 mark against the US Dollar on Friday morning. However, the rate showed signs of an upcoming retreat. The move higher was the throughout the week expected consolidation of the US Dollar, as the Greenback retreated. The jump of the rate was stopped by the upper trend line of the medium term descending channel, which is supported by the 55-day SMA at 1.0609 level. Due to that reason and the expected positive US fundamentals the rate is likely to decline during the day. However, the pair's decline will be hindered by the weekly PP at 1.0582.Daily chart
© Dukascopy Bank SA
Hourly chart: The hourly chart shows that with the rebound the previous descending channel pattern was broken. The rate surged and stopped exactly at the border of the medium scale pattern. No new pattern has formed. However, it can be observed that the hourly simple moving averages are pushing the currency pair higher, as the SMAs are located just below the weekly PP, which is located at 1.0582 level.
Hourly chart
© Dukascopy Bank SA
Read More: Technical Analysis
Markets are neutral
SWFX traders are neutral on the pair, as 50% of open positions are long. Meanwhile, 58% of trader set up orders are set to sell the Euro.
OANDA traders are once more neutral bullish, as 51.89% of trader open positions are long on Friday, compared to 54.39% positions previously. In addition, SAXO bank clients have shifted to the bearish side, as 52.79% of open positions are short, compared to 51.54% long positions on Friday.
Spreads (avg,pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.06 in April
Traders, who were questioned on their longer-term views on EUR/USD between February 10 and March 10 expect, on average, the currency pair to trade around 1.06 by the start of April. In general, 55% of participants believe the exchange rate will be generally above 1.06 in ninety days, and 14% see it above 1.12. In the meantime, 21% (+2%) of those surveyed reckon the pair will be at parity or below. © Dukascopy Bank SA