- SWFX market sentiment is 62% bearish
- 52% of pending orders in 100-pip range are to BUY the Euro
- Strong support cluster near 1.2330
- Upcoming events: US PPI m/m, US Core PPI m/m, US Empire State Manufacturing Index, US Philly Fed Manufacturing Index, US Unemployment Claims, US Capacity Utilisation Rate, US Industrial Production m/m
The EUR/USD currency pair hammered through the floor on Wednesday, as the report showed that the US consumer prices rose more than anticipated in January. The Greenback gained 61 base points or 0.49%against the Euro, but then the exchange rate rebounded significantly.
The release showed that the US Consumer Price Index surged 0.5% over the course of January, beating expectations for only a 0.3% rise. Expectations of further price pressure acceleration strenghtened as well, as the Fed is largerly expected to raise interest rates again in December. A seperate report showed that retail sales in the United States marked an unexpected decline of 0.3%, following a downwardly revised December's figure.
Session allocated to US fundamentals
This trading session includes fundamentals solely from the United States. The most attention should be put on 1330GMT when the US Bureau of Labour Statistics is to release the Producer Price Index and Core Producer Price Index for January. In addition, the Empire State Manufacturing Index, the Philly Fed Manufacturing Index and the weekly Unemployment Claims are likewise published at the same time.
Meanwhile, the Federal Reserve is to release its Capacity Utilisation Rate and Industrial Production at 1415GMT.
EUR/USD consolidates after surge
The Euro failed to move above its weekly high of 1.24 on Wednesday, as it reversed from the bottom boundary of the three-week channel down.Later on, better-than-expected US inflation data strengthened the Dollar, thus allowing for a breakout of the 55– and 200-hour SMAs. This hourly plunge was stopped by the weekly PP and the 100-hour SMA near 1.23. The subsequent surge of the pair was caused risk-averse investors who re-took their positions on Wall Street. The rate advanced even further up to the 1.2450 mark.
Meanwhile, the Asian session was spent calmly due to a Chinese bank holiday. The rate might edge slightly higher today, as no immediate resistance is apparent. However, the general movement should be south, as bears might want to re-gain some lost positions after the strong surge.
Hourly Chart
The Euro has been driven by bulls this week, thus falling short from the bottom boundary of the prevailing four-month channel located near 1.2240. In case the 1.24 mark is surpassed, traders might see further advance up to 1.26 within the following weeks.
However, it is still believed that this week's appreciation might be a short-term correction, as the pair is still expected to approach the bottom channel boundary and the 50.0% Fibo retracement at 1.2250 and 1.2172, respectively.
Daily Chart
Traders are bearish
The number of short positions of the EUR/USD exchange rate remains 62% for the third consecutive session.
The outlook for the two currencies against the rest of the traded financial instruments is as follows: the Euro is 69% bearish and the US Dollar is 61% bullish.
OANDA traders remain bearish in this session, as 61% of open positions are short (+5%). The bearish sentiment of Saxo Bank clients stands at 58% short positions (remains unchanged).
Spreads (avg, pip) / Trading volume / Volatility