- SWFX market sentiment is 60% bearish
- Trader pending orders are neutral
- Pair opened Thursday's session at 1.1187
- Upcoming Events: ADP Non-Farm Employment Change; US Unemployment Claims; US ISM Manufacturing PMI
After scoring gains on Wednesday the EUR/USD currency exchange rate bounced off from the resistance, which is put up by the weekly R1 at the 1.1248 level. The pair is most likely going to fluctuate between the support of the weekly PP at the 1.1204 level and the resistance of the weekly R1 at the 1.1248. However, that will occur until the US data releases scheduled for the second part of the day take place.
Inflation in the Euro zone decelerated during the fifth month of the year, official figures revealed on Wednesday. Eurostat reported that its Flash Consumer Price Index for the 19- country bloc came in at 1.4% year-over-year in May, following the preceding months gain of 1.9% and missing expectations for an increase of 1.5%. Meanwhile, the so-called core inflation rate climbed 0.9% on an annual basis, compared to April's climb of 1.2%, whereas analysts anticipated a rise of 1.0%. Most of the fall in headline inflation came on account of tumbling energy prices.
High impact US releases
This Thursday is the day to watch out for US fundamental macroeconomic data releases. Namely, the US ADP Non-Farm Employment Change at 12:15 GMT, US Unemployment Claims at 12:30 GMT and the ISM Manufacturing PMI at 14:00 GMT are the data sets to watch. The Dukascopy Research team will cover on the live webinar the release of the ADP Non-Farm Employment Change, as it is considered by the team as the most important data set of the day, and volatility is expected.
EUR/USD trades below weekly R1
EUR/USD was trading in a small range below the weekly R1 at 1.12480 since mid-Wednesday. Being an eight-month high, traders may be cautious about further appreciation, pushing the rate lower. As a result, the morning session can be characterised by weak volatility. It might be expected that the pair fails to trade above 1.1248, changing the situation in favour of Euro bears. The closest support located at 1.1204 is a rather distant target for today; thus, the price may halt somewhere in between the 1.1248/04 territory. However, a break of the 1.2480 should be regarded as a strong bullish signal. Traders should be aware of today's fundamentals that may alter the pair's direction.
Daily chart
The hourly chart reveals that the currency exchange rate has hit and for the past night has been bouncing against the weekly R1, which is located at the 1.1248 mark. Meanwhile, all of the hourly SMAs were left behind below in the cluster of the 61.80% Fibonacci retracement level at the 1.1190 mark and the weekly PP at 1.1204.
Hourly chart
Read More: Technical AnalysisBearish sentiment persists
SWFX traders are bearish, as 60% of open positions are short. Meanwhile, pending orders remain neutral in this session.
OANDA traders have decreased their bearish position amount, as 69.44% of open positions are short on Thursday compared to 79.22% previously. In addition, SAXO bank clients are likewise bearish, as 66.77% of open positions are short, compared to 65.15% on Wednesday.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.11 at the start of September
Traders, who were questioned on their longer-term views on EUR/USD between May 1 and today expect, on average, that the currency pair may trade slightly above 1.11 in on the first day of September. In general, 54% (+1%) of participants believe the exchange rate will be above 1.10 in the following ninety days, and 43% see it above 1.12.