- SWFX market sentiment is 63% bearish
- Trader pending orders 53% bullish
- Pair opened Wednesday's session at 1.1341
- Upcoming Events: ECB President Mario Draghi's Speech; US Pending Home Sales
Although Draghi already propelled the Euro into the sky on Tuesday, the ECB President has scheduled a public speech also for Wednesday. That is the main focus of the day. Meanwhile, technical aspects of the EUR/USD currency pair have retreated into the background, as all of the patterns, which were used for guidance have been broken due to the shift in fundamentals.
The mood of American shoppers rose unexpectedly this month, hitting a 16-year high. The Conference Board reported on Tuesday that its Consumer Confidence Index climbed to 118.9 in June, up from the preceding month's 117.6 points, while analysts anticipated a slight drop to 116.1 during the reported month. The share of respondents who perceived business conditions as "good" advanced to 30.8% from the prior month's 29.8%, whereas the share of those who perceived business conditions as "bad" dropped to 12.7%, down from May's 13.9%.
Central Bankers speak
There is one thing that must be watched today. It will be the panel discussion of four top central bankers of the world. Poloz, Draghi, Carney and Kuroda from Canada, EU, UK and Japan are set to discuss monetary policy at the forum in Portugal. These men set the tone for the currencies, which stand against the US Dollar. This is an event that is sure to affect the global financial markets in one way or another.
EUR/USD jumps above 1.13 mark
Just like recently all the patterns on gold were broken, everything previously created is now irrelevant on the EUR/USD charts. The reason for that are massive fundamental changes in the Euro. During yesterday's speech the President of the European Central Bank Mario Draghi made an important announcement. The ECB is set to stop its monetary easing policies, which means that there will be less Euros in circulation. Subsequently that has caused the price of the Euro to skyrocket. The future outlook of the pair is set to be dictated by details of the stimulus cutting. However, some guidance for the short term can be taken from the technical levels. It can be seen that the previously active long term pattern's upper trend line is now providing support. That and the fundamental situation indicate at a surge.
Hourly Chart
The daily chart shows that the surge is set to continue as far as the 1.1550 mark. At that level the upper trend line of the two and a half year downwards aimed channel pattern is located at. Coincidentally, at that level the second monthly resistance is located at. Meanwhile, the only resistance, which the pair faces in tis surge is the weekly R1 at the 1.1395 mark.
Daily Chart
Bearish sentiment persists
SWFX traders remain bearish, as 63% of open positions are short, compared to the stagnation of four consecutive sessions with 61% short positions. Meanwhile, trader set up orders have once more shifted, as 53% of orders are to buy the Euro.
Traders of OANDA have increased their bearish position proportion, as 71.83% of open positions are short on Wednesday, compared to 66.15% previously. In addition, SAXO bank clients also remain bearish, as 63.41% of open positions are short, compared to 64.70% on Tuesday.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast shows EUR/USD will trade at 1.12 in September
Traders, who were questioned on their longer-term views on EUR/USD between May 28 and June 28, expect, on average, that the currency exchange rate may trade at 1.12 during the last week of September. In general, 60% (+1%) of participants believe the exchange rate will be above 1.12 in the following ninety days. Meanwhile, 34% (-2%) of respondents expect to see the rate below 1.10.