- SWFX market sentiment is 59% bullish today
- 54% of pending orders in the 100-pip range are set to SELL
- ECB rate in focus for EUR/USD
Prior to the ECB rate announcement and press conference the EUR/USD had managed to break a descending pattern. This fact combined with the larger pattern and the fact that ECB is expected to squeeze its monetary policy, indicate that today the EUR/USD might jump up t the 1.1680 level.
The European Single Currency appreciated against the US Dollar, following the US PPI release on Wednesday at 12:30 GMT. The EUR/USD exchange currency rate gained 9 pips or 0.07% during a minute, right after the release. The European Single Currency kept moving upwards to trade at the 1.1590 level.
The Bureau of Labor Statistics released US PPI data that came out lower-than-expected of negative 0.10%, compare to forecasted 0.20%. The data represents the change in the price of finished goods and services sold by producers.
It was insignificant data release due to a small pips change during the release time. The upsurge momentum of 11 pips or 0.10% occurred before the release, preparing for the number announcement. We can observe that the rate was showing bearish movements to retrace back to the 1.1585 level after an hour from the release time.
Central Banks and US CPI
On Thursday, EUR/USD traders have two very important events to watch out for. First will be the ECB rate announcement at 11:45 GMT. The event will be covered by Dukascopy Analytics on the bank's webinar platform. The cover will begin at 11:35 GMT.
Second watch the financial charts at 12:30 GMT. At that time the ECP President Mario Draghi will read from a piece of paper his prepared speech and the US CPI data sets will be released. It is expected that the CPI will cause a quick bounce in the financial markets immediately at 12:30 GMT.
Afterwards, as Mario Draghi finishes reading his speech, the questions and answers session of the press conference will begin. During that the President will reveal additional and actually the most important information about the future plans of the central bank. At that time the EUR/USD will go crazy.
EUR/USD short term review
In regards to the near future, most likely, the rate should go downwards due to psychological level at the 1.1640 towards the SMAs cluster at the 1.1600 mark.On the other hand, the currency exchange rate might take the support of the weekly R1 at the 1.1632 mark to surge even higher towards the weekly R2 at the 1.1710 mark.
Hourly Chart
On Tuesday, the EUR/USD currency rate revealed another version of the daily chart of the currency pair. If the pattern manages to force the pair into a rebound, it will be used as a guide for the pairs expected surge up to the 1.1900 mark.
Meanwhile, short term traders will benefit more from noting that the 55-day simple moving average is located at the 1.1610 mark, where it provided resistance on Wednesday and began to clearly support the currency rate on Thursday.
Daily chart
Swiss trader short term oriented market sentiment remains long. Namely, 59% of all traders have open long positions.
Meanwhile, all of the traders on SWFX have prepared pending trade orders, which might be executed in certain situations. Of all the take profits, stop losses, sell and buy orders 57% are set to sell the EUR/USD.
This means that, if the rate increases volatility, the retail sector will push the rate down, as it dumps its long positions by taking profits or shorting the EUR/USD.
Other, more long term oriented FX brokerages also publish their sentiment data. They can help retail traders with understanding the market expectations for the next couple of months. For example, OANDA brokerage traders are 54% short on the pair, and Saxo Bank traders are 56% short.
In general, it can be noticed that short term traders are mostly long. Meanwhile, longer term oriented traders have opened short positions, which dominate their brokerages.
Spreads (avg, pip) / Trading volume / Volatility