- SWFX market sentiment is 57% bearish
- 56.55% of pending orders in 100-pip range are set to SELL
- Pair opened Wednesday's session at 1.1763
- Upcoming Events: ECB President Draghi's Speech
The common European currency continues to move in accordance with the descending channel pattern against the US Dollar. On Wednesday morning it could be observed that the pair faces no notable support until the 1.1670 mark. However, ECB President Mario Draghi was set to give a speech during the early hours of the day's trading. That might even crash the long term ascending pattern.
The Euro continued depreciation against the US Dollar, as the ZEW report showed notable weakening in the German investors' confidence. The EUR/USD fell initially just by 4 base points to continue the trading session below the 1.1768 level.
The Mannheim-based Centre for European Economic Research stated that its German Economic Sentiment Index came in at 10.0 points for August, showing a decline for the third consecutive month. A decrease was fuelled by concerns over the further expansion of the Germany's economy, as the scandal in the country's automobile sector was likely to affect the stability of growth. On the contrary, the current situation in the Euro zone was evaluated much higher than expected.
Draghi gives a speech
Main attention should be focused on Wednesday morning, when Mario Draghi is set to give a speech at the 6th Lindau Meeting on Economic Sciences. This event is almost certainly going to affect the strength of the common European currency. Most likely the EUR will strengthen during the speech, as the ECB President has been pressured into increasing the strength of the currency. However, the time of the speech is tricky, as it was moved from 07:00 GMT to 8:25 GMT and might be moved once more.
EUR/USD finds support at 1.1754
As it was expected, a release of information on the German Economic Sentiment, which appeared to be even less than analysts anticipated, notably affected valuation of the Euro. Namely, it dragged the currency pair down by 0.34%. And the only obstacle that stopped the fall was the weekly PP located at the 1.1754 level.
Given that this barrier practically coincides with the bottom edge of a junior ascending channel, the exchange rate should not plunge any further. From technical perspective it is expected to make a rebound and start to move towards the 1.1800 mark.
However, this scenario might not materialize due to the ECB President Mario Draghi speech that will be delivered at 7:00 GMT and that most likely will cause significant volatility in the markets.
Hourly Chart
The daily chart is the one, which was adjusted during the recent surge of the Euro. The reason for that is the fact that the high levels, not closing prices, of the daily chart are better to be used in pattern drawing in the case of the EUR/USD.
Meanwhile, in regards to the daily timeframe, it has to be noted that the 20-day SMA on Wednesday morning was providing resistance at the 1.1770 mark. Meanwhile, the lower Bollinger band of the daily chart was providing support at the 1.1690 level.
Daily Chart
Markets are bearish on the pair
The SWFX trader open positions are 57% short. Meanwhile, on Wednesday 52.20% of pending commands are to sell.
Traders of OANDA remain largely bearish, as 63.41% of open positions are short. Meanwhile, SAXO bank clients are also not changing their opinion, as 58.98% of traders are short, compared to 61.34% previously.
Spreads (avg, pip) / Trading volume / Volatility