- SWFX market sentiment is 63% bullish (+1%)
- 56% of pending orders in 100-pip range are to SELL the Euro (-5%)
- Upcoming fundamental events: EU Economic Summit, CPI Flash Estimate y/y, Core CPI Flash Estimate y/y; US Core PCE Price Index m/m, Personal Spending m/m, Chicago PMI and Revised UoM Inflation Expectations
The Euro is likely to find support near 1.16 in this session.
The Greenback weakened against the European single currency, following the US Final GDP data release on Thursday. The EUR/USD currency pair gained seven pips, or 0.06%, to continue fluctuating in the 1.1592 area.
The Bureau of Economic Analysis released quarterly Gross Domestic Product data that came out lower-than-expected of 2.0%, and was also lower than the previous period.
According to Mario Blascak, the European Chief Analyst: "The largest positive contributions to GDP stem from non-residential fixed investment, personal consumption expenditures, and exports. The biggest drag in PCE, exports, state and local government spending, federal government spending and a downturn in residential fixed investment. "
Minor data releases
The second and last day of the EU Economic Summit is to take place today. This event gathers various EU and ECB specialists who discuss a range of global economic issues, including migration, security, defence and the economy.
In addition, the Eurostat is to publish the CPI Flash Estimate and its core reading for June at 0900GMT.
The United States will release several data sets later in the day, namely, the Core PCE Price Index and Personal Spending at 1230GMT. The Chicago PMI and Revised UoM Inflation Expectations are published at 1345GMT and 1400GMT, respectively.
Euro boosted by fundamentals
Following the strong depreciation of EUR/USD on Wednesday, the pair stabilised and was trading slightly above the weekly S1 at 1.1553 yesterday. A fall down to the one-year low at 1.1520 did not follow.This lack of direction stopped early on Friday when the pair, boosted by successful talks in the EU Economic Summit, surged 74 pips in one hour and consequently breached the weekly PP and the 55-, 200– and 100-hour SMAs.
It seems that this bullish sentiment could still guide the pair in this session, supported by hourly SMAs. However, traders should consider the 100– and 200-period (4H) moving averages that are located at the upper channel line near 1.1680. Bulls might be reluctant to breach this cluster, thus leaving the rate ranging in between hourly and four-hour SMAs.
Hourly Chart
The common European currency has fallen considerably against the US Dollar since mid-April which marks a 5.95% plunge within a couple of weeks. The pair started to recover on May 30 after hitting a six-month low of 1.1550. It is expected that this up-move continues in the medium term.
The pair has fluctuated in the 1.1545/1.1800 range since mid-May. The 1.18 mark should eventually surrender, thus allowing the pair to appreciate until the 200-day SMAs and the monthly R1 near 1.20.
Daily Chart
Bulls remain in charge
EUR/USD remains strongly bullish with 63% of open positions being long (+1%).
The outlook for the two currencies against the rest of the traded financial instruments is as follows: the Euro is 57% bullish and the US Dollar is 62% bearish. Despite the strong fall apparent this week, traders nevertheless expect some weakening of the US Dollar. In case the Euro is starting to become more bullish, this might indicate to appreciation in the medium term.
OANDA traders continue to strengthen their bullish positions which were standing at 59% early on Friday. A different situation is apparent with Saxo Bank clients who have decreased the number of long positions to 54% (-2%).
Spreads (avg, pip) / Trading volume / Volatility