- SWFX market sentiment is 57% bearish
- 55% of pending orders in 100-pip range are set to BUY
- 57.10% of traders are bullish on the Dollar
- Upcoming Events: US Trade Balance, ISM Non-Manufacturing PMI
During the last five days the currency exchange rate was trying to break through the bottom edge of a senior ascending channel. All these attempts have not been successful so far. Moreover, today it seems that the rate will finally resume the surge due to pressure from a combination of the 55-, 100- and 200-hour SMAs.
The report showing that the US factory orders marked the buggiest drop in almost three years in July contributed to the jump in EUR/USD. The Euro accelerated gains against the Greenback, edging 20 base points higher to the 1.1908 mark.
The Commerce Department stated that orders for US-made goods tumbled 3.3% in July, as the demand for transportation equipment slumped in the same period. However, capital goods orders were stronger than the prior report showed, suggesting a solid business spending in the early Q3. Moreover, an increase in production could be fuelled by expected rise in demand for motor vehicles, as residents in storm-battered Texas aim to replace damaged cars.
ISM Non-Manufacturing PMI in focus
Wednesday will be full of various fundamental events related to Canada, while its southern neighbour will release only two data sets.
One of them represents the latest updates on the Trade Balance, which is a crucial indicator from the macroeconomic points of view, but not very attractive from swing trading perspective.
The other one is the ISM Non-Manufacturing PMI, which shows purchasing managers' attitude towards the current business conditions. This data release, contrary to the previous one, usually arouses relatively high interest among market participants.
EUR/USD under pressure from moving averages
By the end of the previous trading day the currency pair had expectedly made a breakout from a short-term symmetrical triangle. The only difference from similar cases was that it did not choose a clear direction but, instead, continued to move horizontally.
However, today this flat movement is expected to end, as the rate is experiencing pressure from a combination of the 55-, 100- and 200-hours SMAs, which are located slightly below it.
Once the pair will manage to break through the weekly PP at 1.1918, it will have a barrier-free area up until the weekly R1 at 1.2013. The eventual surge is expected to happen despite that 65% of open positions are short.
Hourly Chart
A daily chart reveals the three days in a row the currency pair is moving at the intersection of the bottom trend-line of a senior ascending channel and junior ascending channel. Most likely, the pair will gradually resume the surge and make an attempt to reach the weekly R1 at 1.2013.
Daily Chart
Traders still bearish on the pair
The SWFX market sentiment has slightly increased since yesterday and now is 57% bearish. In the meantime, the outlook for the Euro is 61% bearish, while for the Dollar 57.10% bullish.
Traders of OANDA remain bearish, as 60% of open positions are short. Meanwhile, SAXO are also bearish on this currency pair with 63% of open short positions.
Spreads (avg, pip) / Trading volume / Volatility