- SWFX market sentiment is 68% bearish
- 53% of pending orders in 100-pip range are set to BUY
- 70% of pending commands are set to sell the Euro
- Upcoming Events: German Buba President Weidmann Speaks, US CPI and Retail Sales
In result of reaction on the ECB Meeting Minutes, the Euro advanced by 0.8% against Dollar. Until release of the US macroeconomic data the pair is expected to continue moving upwards towards the weekly R1.
The US producer prices decreased for the first time in more than a year in December, due to falling services costs. The Labour Department stated that the country's PPI slipped 0.1% in the reported month, putting the yearly producer price inflation increase to 2.6% after rising 3.1% in November. Despite the weak correlation between consumer and producer prices, they underline the challenge for the Federal Reserve to reach its 2% inflation goal.
Top American macro data
At 13:30 the American official institutions will release two key macroeconomic indicators, which are expected to cause high volatility in the market and for this reason represent attractive trading opportunity. The Consumer Price Index is project to decrease to 0.1% from 0.4%, while retail sales are expected to drop from 0.8% to 0.5%.
EUR/USD strengthens amid ECB Minutes
Due to release of the minutes of the European Central Bank's December meeting the common European currency appreciated against the buck by 0.87% just in couple of hours and reached the weekly PP at 1.2040. In result of this surge, the pair has formed little ascending channel, which presupposes continuation of the upward movement at least until publication of information on the American inflation and retail sales. These events are expected to cause notable volatility in the markets. However, even in case the data misses expectations the rate is unlikely to break through the two-year high located at the 1.2093 level. From this perspective, the bearish movement towards the monthly PP and the bottom trend-line of a two-month long ascending channel is still considered to be the most likely scenario in the medium term.Hourly Chart
Despite the high volatility caused by different fundamental events, the currency rate is continuing to fluctuate in two ascending channels, simultaneously being squeezed between the monthly PP at 1.1917 and the two-year maximum located at 1.2093. Most probably the pair will continue to fluctuate between these barriers until it receives an impulse strong enough to make a fully-fledged breakout. From dominant pattern's perspective the breakout should happen in southern direction.
Daily Chart
Market sentiment is bearish
In result of the previous trading session the bearish market sentiment has increased, as 68% of open positions are short.
In the meantime, the outlook for the two currencies against the rest of the traded financial instruments is the following: the Euro is 70% bearish and the Dollar is 59% bullish.
Traders of OANDA remain bearish, as 62% (+0%) of open positions are short. SAXO Bank clients are likewise bearish on the pair with 61% (+3%) short positions.
Spreads (avg, pip) / Trading volume / Volatility