- SWFX market sentiment is 55% bearish
- 53% of pending orders in 100-pip range are set to BUY
- 57% of traders remain bullish on the Dollar against the rest of the currency market
- Upcoming Events: US Retail Sales, Empire State Manufacturing Index, Capacity Utilization Rate, Industrial Production and Prelim UoM Consumer Sentiment
Despite positive developments in the US economy, the buck did not manage to secure these achievements and ended previous trading day near the weekly S1, which is located at the 1.1905 level. At the moment, an advance in both directions is quite complicated due to presence of various technical barriers. For this reason, the pair is expected to move more or less horizontally until another American data release that will happen later this day.
The EUR/USD dropped initially after the US consumer inflation reports showed better-than-expected figures. The Euro depreciated against the US Dollar by 0.39% or 46 base points to the 1.1849 mark, though the European single currency managed to return to pre-data levels.
According to the Labour Department's report, the consumer inflation in the US showed a monthly rise of 0.4% in the month of August, with an annual gain of 1.7% in the same period. An increase in the CPI figures boosted expectations for the Fed rate hike in December, which supported bullish sentiment in EUR/USD additionally fuelled by the NK latest missile launch. The next direction of the pair will be determined by Friday's retail sales data.
US Retail Sales in focus
The last day of this trading week will be marked by a bunch of American fundamental data release. However, only one of them is expected to cause certain volatility in the markets and affect value of the buck against other major currencies, i.e. the US Core Retail Sales at 12:30 GMT.
EUR/USD fails to pass 55-hour SMA
As it was expected, first half of the previous trading session the currency pair spent near the monthly PP at 1.1881. Unfortunately, a release of better than expected data on the US inflation did not cause any notable volatility in the markets even though initially traders tried to push the pair through the bottom trend-line of a medium-term ascending channel.
A fully-fledged rebound did not happen as well, as the surge was quickly neutralized by the 55-hour SMAs. Taking into account that the northern side is secured by the 100- and 200-hour SMAs, while the southern side by the above monthly PP, the pair is expected to continue to more relatively horizontally at least until a release of information on the US Core Retail Sales.
Hourly Chart
Due to the abovementioned release, the currency pair has finally left dominant ascending channel and now is gradually heading towards the bottom trend-line of recently formed channel up. In accordance with one of the scenarios expressed yesterday, the pair has found support already at the monthly PP at 1.1881. Except for the weekly PP, which will be updated next week, the pair does not any resistance on its way to the top anymore. For this reason, the Euro has a good chance to grow to the monthly R1 at 1.21.
Daily Chart
Traders still bearish on the pair
The SWFX market sentiment remained unchanged since yesterday and now is 55% bearish. In the meantime, the outlook for the two currencies against the rest of the traded financial instruments is as follows. Euro is 58% bearish, while for the Dollar 57% bullish.
Traders of OANDA remain bearish, as 61% of open positions are short. Meanwhile, SAXO are also bearish on this currency pair with 56% of open short positions.
Spreads (avg, pip) / Trading volume / Volatility