- SWFX market sentiment is 59% short
- Pending orders in the 100-pip range are set to sell in 59% of cases
- No fundamental data releases until Wednesday
The recovery of the EUR/USD continued on Tuesday. During the surge the rate passed a strong resistance cluster at 1.1340. The breaking of the resistance signalled that the currency pair could reach for the 1.1410 mark.
The European Single Currency depreciated against the US Dollar, following the EU Main Refinancing Rate release on Thursday at 12:45 GMT. The EUR/USD exchange currency rate lost 19 pips or 0.17% during a minute, right after the release. The European Single Currency continue trading at the 1.1380 area against the US Dollar.
The European Central Bank released the EU Main Refinancing Rate data in line with expectations of 0.00%.
According to Howard Archer, Chief Economic Advisor to EY ITEM Club, "ECB slightly trims its forecast of Eurozone GDP growth in 2019 to 1.7% from 1.8% seen in September. 2018 growth estimate cut to 1.9% from 2.0%. Growth still seen at 1.7% in 2020. 2021 growth forecast at 1.5%. Balance of growth risks broadly balanced but moving to downside."
Quiet week for macroeconomic data releases
Until Wednesday there are no notable data releases scheduled to occur that might impact any of the major pairs or gold.On Wednesday, the macroeconomic data releases will start at 09:30 GMT with the UK Consumer Price Index. The event is expected to cause at least a 20 base point move.
On the same day at 13:30 GMT the Canadian will publish the Consumer Price Index data sets. During the last half a year the data release has caused fluctuations of at least 40 pips.
Afterwards at 19:00 GMT the event of the week will take place. Namely, the FOMC Statement and the Federal Funds Rate will be published. The Federal Reserve is expected to hike the US central banks interest rate to 2.5% from 2.25%.
In theory the event is expected to cause a US Dollar surge, which would beat the top pairs downwards. This year the interest rate hikes have caused moves of at least 40 base points.
On Thursday, all attention will be paid to events in the UK. Namely, at 09:30 GMT the UK Retail Sales are expected to cause a move from 10 to 40 pips.
Afterwards, the Bank of England will announce their rate decision. The event has caused moves from 26 to 97 pips since May 2018.
On Friday the data releases will continue. During the morning hours, namely, at 09:30 GMT the UK Current Account will be published. This event causes moves from 15 to 45 pips.
The week's data will end at 13:30 GMT. At that time the Canadian Retail Sales and GDP data will be published. Simultaneously the US Durable Goods data sets and Final GDP will be released.
The last event is too complex to explain it shortly. Instead, state your questions at the weekly Monday's economic calendar stream at 12:00 GMT.
The above mentioned data release will be covered by Dukascopy Analytics. The event can be watched on our YouTube channel.
EUR/USD daily review
During the previous trading session, the European Single Currency broke the resistance of the monthly pivot point at the 1.1346 mark. On Tuesday morning, the rate was located between the 55-hour and the 100-hour simple moving averages at the 1.1345 mark.Most likely, the currency exchange rate will keep trading sideways to stay at 1.1300 level. Note, the 200-hour SMA should resist the rate from surge during the day.
However, the monthly pivot point at the 1.1346 mark could support the rate to trade near the weekly R1 at 1.1410 mark.
Hourly Chart
The daily chart shows the rate at crossroads. It has already pierced the lower trend line of a large scale almost horizontal pattern.
Meanwhile, note that a possible surge of the currency exchange rate was stopped by the resistance of the 55-day simple moving average, which was recently located at the 1.1410 level.
Daily chart
Traders continued to increase their short position amount, as 58% of traders were short on Tuesday.
Meanwhile, trader pending orders in the 100-pip range were set to sell in 61% of cases.
Compared to Monday the short sentiment had increased both in regards to open positions and pending orders.