- SWFX market sentiment is 53% bearish (-1%)
- 54% of pending orders in 100-pip range are to SELL the Euro
- Downside potential until 1.2350
- Upcoming data releases: German ZEW Economic Sentiment; US Building Permits; US Housing Starts; US Capacity Utilisation Rate; US Industrial Production m/m; FOMC Members Williams, Quarles and Bostic to speak
Bearish pressure should prevail during the second part of the day.
The Greenback weakened against the Eurozone's single currency, following the US Retail Sales data release on Monday. The EUR/USD currency pair gained only three pips, or 0.02%, to continue going up afterwards.
The Census Bureau released two reports simultaneously, from which Retail Sales data came out better-than-expected, but Core Retail Sales came out in line with forecasts. However, data was more like positive, the US Dollar lost its strength, which can be explained with the fact, that Federal Reserve Bank of New York revealed lower-than-expected Empire State Manufacturing Index data, even though index above zero indicates positive result overall.
Various data releases scheduled for today
Tuesday's trading session will start with the German ZEW Economic Sentiment at 0900GMT. The following day is allocated solely to fundamentals from the United States.
The US Census Bureau is going to release the Building Permits and Housing Starts for the preceding month, while the Federal Reserve will publish the Capacity Utilisation Rate and Industrial Production for the same period at 1230GMT and 1315GMT, respectively.
Three speeches by FOMC members are likewise occurring today. The President of the Federal Bank of San Francisco John Williams is due to speak about monetary policy at a global symposium at 1315GMT and the President of the Federal Bank of Atlanta Raphael Bostic will discuss the economic outlook in a Bloomberg interview at 2140GMT. Meanwhile, The Federal Reserve Governor Randal Quarles is due to testify on supervision and regulation before the House Financial Services Committee at 1400GMT.
EUR/USD falls short from 1.24
The Euro gained enough momentum to dash through the 55– and 100-hour SMAs and a short-term channel down early on Monday. The pair surged 63 pips within a couple of hours and halted shortly before the weekly R1 near 1.24.Taking into account bullish technical indicators, the Euro might continue edging higher for the eighth consecutive session. This surge, however, is likely to be limited by the weekly R1 or the senior channel near 1.24.
Subsequently, the pair should edge lower down to the combined support of the 55– and 100-hour SMAs, the 23.60% Fibonacci retracement and the junior channel near 1.2350.
This session is full of fundamentals from the US which might introduce some volatility in the market and therefore widen the forecasted trading range.
Hourly Chart
Despite breaching the 55-hour SMA late in March, the Euro managed to reverse from the long-term channel and return back to this line. However, it is still expected that the pair ends this correction north and targets the 1.2150 area this week where the monthly S1, the 100-hour SMA and the 50.00% Fibonacci retracement are located.
Daily Chart
Bearish sentiment grows stronger
The SWFX market sentiment for EUR/USD is 53% bearish (-1%).
The outlook for the two currencies against the rest of the traded financial instruments is as follows: the Euro is 59% bearish and the US Dollar is 54% bullish.
The bearish sentiment of OANDA traders stands at 58%. Saxo Bank clients share the same sentiment with 63% of open positions being short (+2%).
Spreads (avg, pip) / Trading volume / Volatility