- SWFX market sentiment is 59% bearish
- 51% of pending orders in 100-pip range are set to BUY
- 55% of traders are bullish on the Dollar
- Upcoming Events: US Existing Home Sales and Fed Chair Yellen Speaks
Despite escalating tensions in Spain, the Euro continued to rally against the Dollar yesterday. In result of this surged the pair has reached a new weekly cellar at 1.1858 level. Despite a sharp downfall in the early morning a location of various technical indicators suggests that common European currency is going to continue to gain value against its American counterpart.
The EUR/USD continued gradual increase to get through the 1.1800 level in the wake of the dim US housing market data. Following the release, the Euro gained against its American rival 11 base points or 0.10% to the 1.1769 mark.
The Commerce Department revealed that building permits fell to 1.13M in the month of September. Meanwhile, homebuilding in the US dropped to the weakest level in a year in reported period, as Hurricanes Irma and Harvey caused the disruption of single-family homes construction in the South, which could drag the country's GDP growth in the September quarter.
Fed Chair speech in Washington DC
In essence, there are no notable events scheduled in an economic calendar for today, including Janet Yellen's speech at the Herbert Stein Memorial Lecture in Washington at 23:30 GMT. Over the past couple of weeks she has made a lot opening remarks at different events and many of them did not arouse especially high interest among traders. So, it is quite possible that similar situation will repeat today as well.
EUR/USD finds new cellar at 1.1858
Although Spanish authorities decided to suspend Catalonia's autonomy, the common European currency did not show negative reaction to this news. In fact, it bounced off from a combination of the 100-, 200-hour SMAs and the weekly PP and managed to break through the upper boundary of one of the descending channels. After failing to bypass the 1.1858 level three times in a row it slipped back to the above weekly PP. On the one hand, the 64% average bearish market sentiment and anticipation of Janet Yellen speech later this day play in favour of appreciation of the buck. On the other hand, the southern side remains protected by a bunch of moving averages, which have already stopped the pair from falling below the 1.1800 mark.
Hourly Chart
In result of the previous trading session the currency pair broke through the 55-day SMA and approached towards the combined resistance set up by the monthly PP and the bottom boundary of a dominant descending channel. From technical perspective, the southern side contains fewer obstacles for the pair. In this sense, further appreciation of the Dollar seems a more viable scenario.
Daily Chart
Traders remain bearish
In result of the previous trading session the bearish market sentiment slightly increased, as 59% of open positions are short now.
In the meantime, the outlook for the two currencies against the rest of the traded financial instruments is the following: the Euro is 63% bearish and the Dollar is 55% bullish.
Traders of OANDA remain bearish, as 64% (+3%) of open positions are short. Meanwhile, SAXO are also bearish on this currency pair with 59% (+0%) of open short positions.
Spreads (avg, pip) / Trading volume / Volatility