- SWFX market sentiment is 59% bullish today
- 53% of pending orders in the 100-pip range are set to SELL
- EU CPI will be covered
The EUR/USD currency exchange rate has broken the ascending pattern. The event was expected due to a couple of factors. The pattern was too narrow for the range that it covered. Moreover, a more dominant pattern was expected to form after a recent rebound in the borders of a third, much larger channel down.
The European Single Currency weakened against the US Dollar, following the US Prelim GDP data release on Wednesday at 12:30 GMT. The EUR/USD currency pair lost only 6 pips or 0.05% at the time of the release but the whole drop totalled 10 pips or 0.09%.
The Bureau of Economic Analysis released the US Prelim GDP data that came better-than-expected. Namely, the GDP grew by 4.2%, compared with the forecasted 4.0%. The data release showed that the US currency should be more demanded than previously though.
Minor EU data
The only worth mentioning data on Friday is the EU CPI Flash Estimates data sets that will be published at 09:00 GMT.
EUR/USD reveals descending pattern
The European Single Currency appreciated 0.25% against the US Dollar during morning hours. The currency pair bounced off the bottom of a new trend line and retraced back to the monthly pivot point near the 1.1690 level to remain relatively unchanged from the previous trading session. The rate was at the 1.1680 level.The 55-hour and the 100-hour SMA's passed through the rate during Thursday's session. The 55-hour SMA played a role of resistance for the currency pair on Friday. Moreover, it seems that the rate might move upwards breaking the 55-hour SMA's resistance level and pass through the monthly pivot point to continue trading near the 1.1400 mark.
The rate is still waiting for the squeeze of the 55– hour and the 100-hour SMA's which might force the rate to breakout.
Hourly Chart
After reviewing the daily chart the most dominant pattern was spotted. It is a massive scale descending channel pattern, which has been guiding the rate downwards since February. The recent surge provided the needed reference point to properly drawn the just mentioned channel.
On the chart one can observe that the recent surge represents the pair's first move in the aftermath of the announcement of Jerome Powell. This move most likely is the first one in the borders of a large scale pattern. The large scale pattern will be junior to the already mentioned dominant pattern and show a swing in the borders of the larger pattern.
Daily chart
The proportion of long positions to short positions on the Swiss Foreign Exchange has remained unchanged, as 59% of the short term oriented Swiss traders were long.
Meanwhile, all of the traders on SWFX have prepared pending trade orders, which might be executed in certain situations. Of all the take profits, stop losses, sell and buy orders 54% are set to sell the EUR/USD. This means that, if the rate increases volatility, the retail sector will push the rate down.
Other, more long term oriented FX brokerages also publish their sentiment data. They can help retail traders with understanding the market expectations for the next couple of months. For example, OANDA brokerage traders are 60% short on the pair, and Saxo Bank traders are 54% short.
All of the sentiment information provides us with the understanding of the collective market thought. Namely, the EUR/USD has still open short term long positions, which have close by stop losses and take profits that can be observed on the SWFX sentiment. Meanwhile, the longer term traders have already moved to the bear side and shorted the pair.
Spreads (avg, pip) / Trading volume / Volatility