- SWFX market sentiment is 55% bearish
- 72% of pending orders in 100-pip range are set to SELL
- 50% of traders are bullish on the Dollar
- Upcoming Events: US Non-Farm Employment Change, Average Hourly Earnings, Unemployment Rate, ISM Non-Manufacturing PMI, Trade Balance, Factory Orders
In result of disclosure of details about the new tax reform, the Dollar lost some ground to the common European currency yesterday. Although from technical point of view weakling of the buck is expected to continue, a release of better than expected information on the US labour market might alter this scenario.
The Euro fell slightly against the US Dollar, after the Federal Reserve announced its interest rate decision. Following the release, EUR/USD was 12 base points down touching the 1.1615 mark. However, the pair managed to climb to the 1.1660 area on early Thursday ahead of the row of European economic reports.
The Federal Reserve announced that it kept key interest rates unchanged and pointed to strong US economic expansion and better labour market conditions, as recent hurricanes had only short-term impact on economic activity. The Bank's policymakers kept their encouraging stance, when acknowledging that consumer price growth was still soft, but did not lowered their evaluations of pricing expectations.
US labour market update
At 12:30 GMT traders can observe a combined data release, which will consist of the Non-Farm Employment Change, Average Hourly Earnings and Unemployment Rate. In addition to that, at the 14:00 GMT the Institute for Supply Management will publish its information on the US Non-Manufacturing PMI.
EUR/USD soars amid Powell pick
The US President Donald Trump named Governor Powell as the new Fed Chair yesterday. However, markets showed little response to this decision, as it was widely expected. The news that actually moved the currency rate was disclosure of some details of the new tax reform. From technical point of view, the weakening of the buck resulted in formation of a junior ascending channel. However, the exchange rate is likely to fail to surge to its upper boundary, as that path is blocked by a combination of the weekly PP at 1.1674 and the falling 200-hour SMA near 1.1682. The likelihood of a rebound is also supported on daily chart where the pair additionally faces the 23.6% Fibonacci retracement level at 1.1679. Plus the average market sentiment remains 59% bearish.
Hourly Chart
On daily chart the pair is gradually approaching combined resistance set up by the weekly PP and the 23.6% Fibonacci retracement level at 1.1679. In addition to that there is another barrier near the 1.1700 mark, consisting from the 100-day SMA and the monthly PP. These facts indicate on the upcoming rebound and further strengthening of the Dollar. However, others might argue that there exists junior ascending triangle pattern. In that case, the pair is likely to break to the north.
Daily Chart
Traders remain bearish
In result of the previous trading session the bearish market sentiment insufficiently increased, as 55% of open positions are short now.
In the meantime, the outlook for the two currencies against the rest of the traded financial instruments is the following: the Euro is 61% bearish and the Dollar is 50% bullish.
Traders of OANDA remain bearish, as 63% (+1%) of open positions are short. Meanwhile, SAXO are neutrally bearish on this currency pair with 55% (+3%) of open short positions.
Spreads (avg, pip) / Trading volume / Volatility