- SWFX market sentiment is 59% bearish
- Trader pending orders are 52% bearish
- Pair opened Tuesday's session at 1.1168
- Upcoming Events: US Core PCE Price Index; US Personal Spending; US CB Consumer Confidence; German Retail Sales; EU CPI Flash Estimate
As it was forecasted on Monday, the common European currency is depreciating against the US Dollar, as weak support levels are easily passed. Various clues indicate that the EUR/USD currency exchange rate will decline until it reaches the 1.1050 mark. That would occur in the case of no new market information, which could strengthen the Euro in the wake of Mario Draghi's recent comments on monetary policy.
The US economy expanded at a stronger-than-initially expected pace in the March quarter; however, an economic slowdown remained on the table in the second quarter. The Commerce Department reported on Friday that Q1 GDP growth came in at a seasonally adjusted annualized pace of 1.2%, compared to an originally reported pace of 0.7%. Meanwhile, analysts expected the economy to expand 0.9% in the reported quarter. However, that was the worst performance over the past 12 months.
Loads of minor data releases
During the next 24 hours there will be a lot of various data sets released. However, it is highly unlikely that any of them will create notable volatility. First of all at 12:30 GMT the US Core PCE Price Index and US Personal Spending data will be published. The most important of the US data sets will be the CB Consumer Confidence, which will be out at 14:00 GMT. That will be all for Tuesday's trading session. Although, on Wednesday morning various data will be released in the EU. The German Retail Sales data will be available at already 06:00 GMT, and the EU CPI data will be out at 09:00 GMT.
EUR/USD consistent with forecast
As it was expected the common European currency retreated down to the weekly S1 at the 1.1141 level against the US Dollar. However, it can be observed that the pair is already heading even lower, as the weekly S1's attracting force has been already left behind. The next support, which will hinder the decline of the common European currency against the Greenback, will be the weekly S2 at 1.1097. Moreover, it is possible that during the week the pair will decline as low as 1.1050 mark, where nearby a strong support cluster is located at.
Daily chart
On the hourly chart it can be observed that the weekly S1 did not even put up any fight in the effort to stop the decline of the Euro against the US Dollar. In addition, it can be seen that the hourly levels of significance in the form of the simple moving average, have stayed behind near the 61.80% Fibonacci retracement level, which is located at the 1.1190 mark. Moreover, the lower Bollinger band of the hourly chart had almost approached the weekly S2 during the morning hours of Tuesday's trading session.
Hourly chart
Read More: Technical AnalysisTraders optimistic towards the US Dollar
SWFX traders remain bearish, as 61% of open positions are short. However, only 52% of trader set up orders are to sell the Euro.
OANDA traders remain largely bearish, as 71.43% of open positions are short on Tuesday compared to 67.09% previously. In addition, SAXO bank clients are likewise bearish, as 62.99% of open positions are short, compared to 63.52% on Monday.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.11 in late August
Traders, who were questioned on their longer-term views on EUR/USD between April 30 and today expect, on average, that the currency pair may trade slightly above 1.11 in late August. In general, 52% (-2%) of participants believe the exchange rate will be above 1.10 in the following ninety days, and 43% (-1%) see it above 1.12.