- SWFX market sentiment is 69% bullish today
- 63% of pending orders in the 100-pip range are set to SELL
- US Retail Sales data at 12:30 GMT
By the middle of Wednesday's trading session the EUR/USD pair had encountered support at the 1.1325 mark. However, compared to Tuesday's morning, the rate had managed to decline by 0.5%.
The Greenback weakened against the European single currency, following the US CPI data release last Friday. The EUR/USD currency pair lost 15 pips, or 0.13%, to continue fluctuating in the 1.1455 area, which is an insignificant change.
The Bureau of Labor Statistics released Consumer Price Index data that came in line with expectation of 0.2%. The CPI rate stays unchanged, repeating itself from period to period.
The Capital Economics' senior US economist Michael Pearce said. "Our forecast is that core inflation will continue to trend higher from here, with core PCE inflation hitting 2.3 per cent by the end of this year. With economic growth strong and inflation overshooting, the Fed will continue hiking interest rates once a quarter over the coming 12 months."
US Retail Sales data sets at 12:30 GMT
On Wednesday there will be data sets being released that will influence the financial markets through the strength of the US Dollar. Namely, the US Retail Sales and Core Retail Sales data sets will be published at 12:30 GMT.
The event's cover will begin at 12:20 GMT on the Dukascopy live webinar platform. Meanwhile, note that at 12:00 GMT the weekly fundamental event review webinar will take place.
EUR/USD continues to decline
Euro bulls failed to gather the necessary momentum to dash through the 55-hour SMA. Instead, EUR/USD breached the monthly S3 and the senior channel just to test the weekly S1 at 1.1325 early on Wednesday. This level is a historical resistance/support point, as well as the pair's lowest position since June, 2017.Despite flashing bullish signals during the past two days, fundamentals have weighted heavily on the European common currency. However, the strong bearish pressure has visibly allayed.
This allows to think that another test of the 55-hour SMA is likely to occur near 1.14 today. A breakout of this cluster should result in further advance up to the 50.00% Fibo and the monthly S2 circa 1.1460. In case the opposite scenario occurs, the daily target is the weekly S2 at 1.1240.
Hourly Chart
Due to the recent sudden drop a full review of the daily chart has been conducted. There are couple of main points to describe.
First of all relevant Fibonacci retracement levels were drawn, which indicate that the drop was being held back by a 50.00% Fibonacci retracement level. On Friday that level was passed. The next supporting Fibonacci retracement level is at the 1.1284 mark located 61.80% retracement level.
Meanwhile, the most notable fact is the discovery of the large scale descending pattern, which represents the currency exchange rate's decline throughout 2018. Although, the pattern's support line is not going to provide support in the upcoming months, as it is as low as the 1.10 mark.
Daily chart
On Wednesday, Swiss Traders continued to be long on the EUR/USD currency exchange rate. Namely, SWFX traders were long on the pair in 69% of all cases since Monday.
However, throughout the week the retail sector was preparing to close their long positions and do additional selling, as trader set up orders on Tuesday were set to sell in 73% of all cases. On Wednesday, already 76% of all trader set up orders were set to sell.
Meanwhile, OANDA traders are bullish on the EUR/USD pair as 55% of open positions are long. In addition, Saxo bank traders are 55% bullish in regards to the currency exchange rate.
Spreads (avg, pip) / Trading volume / Volatility