- SWFX market sentiment is 55% bearish
- 62% of pending orders in 100-pip range are set to BUY
- 56% of traders remain bullish on the Dollar
- Upcoming Events: US CB Consumer Confidence, New Home Sales and Yellen's speech
Previous trading session was significant in the way that the pair made a breakout from a symmetrical triangle. In other words, the exchange rate broke through the bottom edge of a dominant long-term ascending channel and preferred to stay in a more recently formed descending channel.
EUR/USD attempted to rebound from the 1.1860 mark after a lingering downmove, which was additionally fuelled by the weak Ifo economic report. Following the publication, the Euro lost against the Greenback 10 base points or 0.09%, while the bearish sentiment was sustained putting the pair to the monthly low.
The Ifo Institute for Economic Research reported on Monday that its Business Climate Index dropped to 115.2 in September, reflecting unclarities surrounding the German Federal Election, which left Angela Merkel in front of tricky coalition negotiations. Statement showed that firms were less satisfied with both current situation and near-term outlook, as the country's economy entered the period of new legislation.
Yellen speech in focus
Today there will not be any significant news from the European continent. The United States, in contrast, will publish the latest update on consumers' confidence. But the most important event will begin at 16:45 GMT when Janet Yellen will start delivering a speech on monetary policy at the National Association for Business Economics Annual Meeting.
EUR/USD falls from symmetrical triangle
As it was expected, a combination of the 55-, 100- and 200-hour SMAs around the weekly PP, which is located at the 1.1948 level, did not allow the rate to surge any further. Because of the rebound, most of the previous trading session movement of the pair was guided by bears, which pushed it out of a symmetrical triangle. In other words, a long-term dominant ascending channel was broken.
Such outcome indicates that today the currency rate is likely to continue to slip to the bottom, trying to reach the lower trend-line of a three week long descending channel. And the fact that it located below the monthly PP at 1.1881 and the weekly S1 at 1.1861 as well as the above moving averages, only supports this scenario.
Hourly Chart
Previous trading session resulted in dissolution of a previously active symmetrical triangle. The breakout to the south confirmed a change in the general trend. In other words, from this moment a descending channel is expected to guide movement of the currency exchange rate, which in the short run most likely is going to try to make a second reaction low.
Daily Chart
Traders remain bearish on the pair
The bearish market sentiment continues to dominate the market, as 55% of open positions are short. In the meantime, the outlook for the two currencies against the rest of the traded financial instruments is as follows. Euro is 60% bearish, while for the Dollar 56% bullish.
Traders of OANDA remain bearish, as 64% of open positions are short. Meanwhile, SAXO are also bearish on this currency pair with 58% of open short positions.
Spreads (avg, pip) / Trading volume / Volatility