- SWFX market sentiment is 63% bearish
- Trader pending orders 51% bearish
- Pair opened Tuesday's session at 1.1213
- Upcoming Events: US CPI, US Retail Sales, US Federal Funds Rate and FOMC meeting
The common European currency found a support and is planning to resume a movement in the upward direction against the American Dollar. However, it is possible that the release of a package of US fundamental data today will shake the Greenback in the opposite direction through the 61.80% Fibonacci retracement level at 1.1190.
US producer prices held steady last month amid low energy prices. The Labour Department reported on Tuesday that its Producer Price Index came in at 0.0% in May, following the preceding month's climb of 0.5% but meeting analysts' expectations. On an annual basis, the headline PPI rose 2.4%, compared to April's 2.5% jump, which was the largest yearly rise since February 2012. In the meantime, the so-called core PPI climbed 0.3% last month, following April's rise of 0.4%, whereas analysts expected core producer prices to increase 0.2%.
US macroeconomic data and monetary policy
In terms of macroeconomic data, today will be marked with a release of data on the US CPI and Retail Sales. Both data sets will be covered by the Dukascopy Research Team at 12:30 GMT. The coverage webinar is set to begin at 12:00 GMT. In the second half of the day any fundamental data release impact will be wiped out by the information coming out from the FOMC. The FOMC is set to announce their rate decision and publish their meeting protocols and economic outlook at 18:00 GMT.
EUR/USD breaks out of channel
The common European currency gained enough strength from the support of the 38.20% Fibonacci retracement level to break the descending pattern, in which it traded against the US Dollar. However, the surge was stopped on Wednesday morning by the weekly PP, which is located at the 1.1216 mark. If the resistance is broken during the day's trading session, it is most likely that the currency exchange rate will ascend to the 200-hour SMA at the 1.1233 level. On the other hand the pair might begin a decline. However, it is highly unlikely as the 55 and 100-hour SMAs are providing support to the currency exchange rate near the 1.1210 level. Meanwhile, as it can be observed on the right, the daily technical indicators are forecasting a surge on a daily timeframe.
Hourly Chart
The daily chart reveals that the currency exchange rate is moving horizontally towards the bottom line of the ascending long-term channel in a limbo between the 38.20% Fibonacci retracement level from the bottom and weekly PP from the top during the last four trading sessions.
Daily Chart
Read More:Bearish sentiment persists
SWFX traders are 63% short in regards to the pair on Wednesday. In the meanwhile, 51% of set up orders are to sell the Euro.
OANDA trader sentiment remains largely bearish, as 69.73% of open positions are short. Meanwhile, SAXO bank clients have not changed their stance also, as 62.78% of open positions are short, compared to 62.51% on Tuesday.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast shows EUR/USD will trade around 1.11 in September
Traders, who were questioned on their longer-term views on EUR/USD between May 14 and June 14, expect, on average, that the currency exchange rate may trade slightly above 1.11 during the second week of September. In general, 51% (+2%) of participants believe the exchange rate will be above 1.12 in the following ninety days. Meanwhile, 37% (-8%) of respondents expect to see the rate below 1.10.