- SWFX market sentiment is 63% bullish today
- 56% of pending orders in the 100-pip range are set to SELL
- Non-relevant but notable data releases
On Wednesday, the EUR/USD pair had extended its surge. Moreover, the rate had touched the 1.16 mark during the morning hours of the day's trading session. Meanwhile, during the move an ascending pattern was revealed on the hourly chart.
The Greenback weakened against the European Single Currency, following the United States Building Permits release on Thursday at 12:30 GMT. The EUR/USD currency pair 1 minute candle gained only 4 pips, or 0.03% at the release time, but combined with the buying action occurring before the data was released, there was a surge of 17 pips or 0.15% in total.
The Census Bureau released US Building Permits data that came in line with expectation of 1.30 Million. There was no change between actual and forecasted data this time.
Scott Volling, principal at PricewaterhouseCoopers said: "June appeared to be an anomaly, but July results indicate a trend. With permits still fairly solid, we will need to see if the trend continues into the late summer/early fall or if recent permits translate to stronger starts in the coming months ".
Canadian Retail and US Crude Oil
The two first empty trading session of the week are over. Macroeconomic data will be once more released and cause sudden bounced in the financial markets. However, they will not influence the US Dollar.
At 12:30 GMT the Canadian Retail Sales will be published. This data release is expected to cause a widening of the trading range of 70 base points. The data release will be covered by Dukascopy Analytics on the bank's live webinar. The event will start at 12:20 GMT.
Moreover, there will be another notable data release occurring during the day. At 14:30 GMT the US Crude Oil Inventories data will be published. The data has caused fluctuations of at least 50 cents in oil prices throughout this summer. The release cover by Dukascopy Analytics will begin at 14:20 GMT.
EUR/USD halts at 1.16
Despite flashing bearish signals, EUR/USD failed to halt at the weekly R1 on Tuesday. The Euro did remain near this level during the morning session, but was then pushed higher by a strong three-hour surge up to 1.16. As a result, the total gain for the day was 100 pips.As apparent on the chart, the Euro has been reluctant to move past the given psychological level. This means that the expected decline is likely to happen today. Technical indicators are starting to edge lower which is also a bearish signal. The nearest support is the 55-hour and 100-period (4H) SMAs and the weekly R1 circa 1.15.
In case fundamentals cause high volatility in the market, the Euro might even target the 200-hour SMA at 1.1420. In terms of upside potential, the senior channel and the monthly PP are located at 1.1685.
Hourly Chart
The currency exchange rate still remains in the boundaries of a dominant descending channel pattern. Watch its upper trend line, which might provide the needed resistance to stop the surge and force the Euro down against the US Dollar.
Daily chart
On Wednesday, SWFX long position proportion had decreased from 65% to 63%. This indicates that some retail traders have closed their long positions and taken profit at the 1.16 mark.
Meanwhile, 60% of Swiss trader set up orders are set to sell. These orders are considered normal, as all of the long positions have a take profit and stop loss orders. Moreover, some might be looking for a retracement downwards that would occur after the surge.
Although, by looking at the more long term oriented brokerages, a different picture can be observed. The sentiment at the brokerages was previously neutral. On Wednesday, Oanda traders were 55% short and SAXO bank's sentiment was 53% short.
Spreads (avg, pip) / Trading volume / Volatility