- SWFX market sentiment is 57% bearish (+1%)
- 59% of pending orders in 100-pip range are to SELL the Euro
- The Euro once again stopped near 1.2350
- Upcoming events: FOMC Members Dudley and Brainard to speak, IBD/TIPP Economic Optimism
The ISM Manufacturing PMI release presented a stronger-than-anticipated data, causing a further Dollar strengthening and a subsequent down move in the EUR/USD exchange rate. The pair declined 10 base points, or 0.08%, reaching the 1.2163 level.
The ISM stated that the US Manufacturing PMI increased from 59.1 in January to 60.8 in February, representing the highest mark since May 2004.
The US manufacturing activity strengthened in the reported month mainly due to expending exports that are showing their highest growth rate since April 2011. In fact, growing employment rate also was one of the factors driving the overall expansion in the domestic manufacturing sector.
Session with speeches
This trading session includes two speeches. The President of the Federal Bank of New York William Dudley is set to speak about the economic impact of 2017 hurricanes at 1230GMT, while The Federal Reserve Governor Lael Brainard will deliver a speech titled "Economic and Monetary Policy Outlook" at 2230GMT.
EUR/USD weakens near 1.2350
As previously expected, the combined support of the 55– and 200-hour SMAs and the weekly PP provided un unbreakable resistance circa 1.2275. This allowed bulls to take over the market and push the rate up to the 23.60% Fibo retracement at 1.2358. The Euro, however, remained reluctant to surpass the existing two-week resistance near 1.2350.As apparent on the chart, the short-term ascending channel (drawn with dashed lines) has lost its bullish momentum. This suggests that a breakout south should occur during the following hours, thus sending the pair lower towards the 1.2275 area.
Given that the 55-hour SMA and the monthly PP are likewise located nearby, losses could be limited by near 1.23. From the upside, the weekly R1 at 1.24 is unlikely to surrender today.
Hourly Chart
During the second part of last week, the Euro has bounced off the 55-day SMA and is moving closer to the 1.24 area. However, the general trend does show that the pair is likely to depreciate in the medium term, suggesting that the current long-term channel could be breached to the downside circa 1.2170. Technical indicators on the daily time-frame are likewise supportive of the bearish scenario.
Daily Chart
Traders are bearish
The number of short positions of the EUR/USD exchange rate is 57% in this session (+1%).
The outlook for the two currencies against the rest of the traded financial instruments is as follows: the Euro is 63% bearish and the US Dollar is 56% bullish.
OANDA traders have diminished their bearish sentiment by one percentage point, thus currently being located at 58% short positions. The bearish sentiment of Saxo Bank clients stands at 60% short positions (+2%).
Spreads (avg, pip) / Trading volume / Volatility