- SWFX market sentiment is 53% bearish
- 53% of pending orders in 100-pip range are set to SELL
- 56% of traders remain bullish on the Dollar
- Upcoming Events: US Core Durable Goods Orders, Pending Home Sales, Crude Oil Inventories
In result of the previous trading session, the currency pair reached the bottom trend-line of a medium-term descending channel. From trade pattern theory perspective, the rate has to make a rebound today. On the other hand, the falling moving averages suggest that the Dollar continue its awaited recovery against the Euro, trying to reach the 100% Fibonacci retracement level at 1.1714.
The EUR/USD currency pair showed stormy reaction ahead and on the Fed's Chair Janet Yellen address. Before the speech started, the EUR fell sharply against the US Dollar, touching the four-week low, but gained strength back initially. In the Wednesday's morning session the pair continued to consolidate below the 1.1800 level.
Janet Yellen sounded more hawkish, telling that the Fed is likely to raise rates so long as inflation growth keeps accelerating, and suggested the Central Bank to wary of making changes too gradually. Meanwhile, the Euro was influenced by uncertainties concerning the ECB monetary policy outlook, as Mr. Draghi and his colleagues failed to clarify the next moves on the QE tapering.
US Core Durable Goods Orders in focus
Today will be the first quiet day in terms of the central banks chairmen's speeches. However, this does not mean Wednesday will lack other fundamental data releases, as at 12:30 GMT the American Census Bureau will publish an update on the Core Durable Goods Orders as well as the Pending Home Sales.
EUR/USD tries to break medium-term channel
As it was expected, the Dollar continued to appreciate against the Euro and reached the bottom edge of medium-term descending channel yesterday. In fact, a reaction of traders on release of the CB Consumer Confidence even pushed the pair a little bit outside the pattern. But the subsequent Janet Yellen's speech returned it back to the 1.18 area.
Although bears are relentlessly trying to push the rate to the south, from trade patterns perspective a rebound should follow. In favour of this scenario speaks the fact that the pair is located at the intersection of lower boundaries of two descending channels as well as the weekly S2 at 1.1774. On the other hand, the 55- and 100-hour SMAs most probably will try to block any attempt to return back to the 1.1861 levels.
Hourly Chart
On daily chart the pair is making quite interesting move. After breaking from the previously dominant long-term ascending channel, the rate was expected to start slowly moving in a medium-term descending channel. Instead, the pair entered into a three day downfall, which is likely to push the pair out of the above pattern. On the other hand, the pair is already located not far away from the 100% Fibonacci retracement level. This means that a new rebound is likely to follow in the upcoming days.
Daily Chart
Traders remain bearish on the pair
The bearish market sentiment continues to dominate the market, as 53% of open positions remain short. In the meantime, the outlook for the two currencies against the rest of the traded financial instruments is as follows. Euro is 57% bearish, while for the Dollar 56% bullish.
Traders of OANDA remain bearish, as 65% of open positions are short. Meanwhile, SAXO are also bearish on this currency pair with 55% of open short positions.
Spreads (avg, pip) / Trading volume / Volatility