- SWFX market sentiment is 55% short
- Pending orders in the 100-pip range are set to sell in 52% of cases
- The UK voting on Brexit affects all markets
EUR/USD has managed to break the previously numerous times tested upper trend line of a dominant descending pattern. The surge had managed to extend itself up to the 1.1440 level before ending and retreating. Meanwhile, note that Brexit Tuesday will make most other forecasting methods obsolete.
The European Single Currency appreciated against the US Dollar, following the US ADP Non-Farm Employment Change data release on Thursday at 13:15 GMT. The EUR/USD exchange currency rate gained 15 pips or 0.13% during a minute, right after the release. The European Single Currency continued trading at the 1.1360 area against the US Dollar.
The Automatic Data Processing, Inc. released the US ADP Non-Farm Employment Change data that came out lower than expected of 179K, compare to forecasted 195K.
Ahu Yildirmaz, the Vice President and Co-Head of the ADP Research Institute said, "Although the labor market performed well, job growth decelerated slightly. Midsized businesses added nearly 70 percent of all jobs this month. This growth points to the midsized businesses' ability to provide stronger wages and benefits. It also suggests they could be more insulated from the global challenges large enterprises face."
Brexit vote Tuesday incoming
On Tuesday, all attention will be on the Brexit vote. It is set to take away attention from all other events in the financial markets.However, note that on Tuesday the UK Average Earnings Index and Unemployment Rate are set to be published at 09:30 GMT. This data release usually causes a reaction on the GBP/USD from 15 to 30 pips. Although, a reaction just prior to the Brexit vote is unlikely.
Meanwhile, on Tuesday the US Producers Price Index will be released at 13:30 GMT. This data release is set to slightly impact all the pairs that involve the US Dollar. For example, the EUR/USD could bounce around ten pips on the release.
On Wednesday, the US Consumer Price Index change will be published at 13:30 GMT. The event is expected to cause around 20 pip reaction on the EUR/USD.
Note that on Wednesday the biggest move that can be caught will occur on the oil price benchmarks. Namely, at 15:30 GMT the US Crude Oil Inventories data release will cause a sudden move of more than one percent.
On Thursday, the attention will be taken by central bank rate announcements. Namely, at 08:30 GMT the Swiss National Bank will publish their rate and at 12:45 the ECB will publish their interest rate.
The last day of the week will have two notable data releases. At 09:00 GMT the European Manufacturing and Services PMI's created by Markit will be published.
Afterwards, the US Retail Sales data sets will be out at 13:30 GMT. The event might cause a 20 pip bounce.
All of the above mentioned data releases will be covered by Dukascopy Analytics. The events can be watched either on the bank's webinar platform or on our YouTube channel.
EUR/USD daily review
During the late part of Friday's trading session the EUR/USD managed to break the resistance of the dominant descending channel pattern at the 1.1400 level. The event increased volatility, which lasted into the second half of Monday's trading.The surge ended after meeting the weekly R1 at 1.1430. Due to that reason a decline began, which is expected to decline below the 1.1400 mark. The reason for that is the fact that the pair has no technical support as low as the 1.1380 level.
On the other hand, the volatility is set to remain high and direction unclear until the UK parliament votes on the Brexit deal.
Hourly Chart
The daily chart's junior pattern has bene broken. It signals that there might be another surge in the borders of the larger patterns until the rate reached the upper trend line of the most dominant pattern.
Although, that can happen in more than a couple of ways. Horizontally, by surging upwards or by trading in zig-zags for the next couple of months.
Meanwhile, take into account that the resistance of the 55 and 100-day simple moving averages respectively at 1.1450 and 1.1520 will be providing resistance to a possible surge.
Daily chart
The Swiss Foreign Exchange traders had become 52% bullish on Friday. The bullish sentiment was gone on Monday, as 55% of trader open positions were short during the second half of Monday's trading session.
Meanwhile, trader pending orders in the 100-pip range were set to sell in 52% of cases. The orders have been almost neutral for more than a week.
It could be observed, that instead of the slightly previous bullish sentiment, traders were shorting the EUR/USD on Monday.