- SWFX market sentiment is 74% bearish (+2%)
- The number of pending orders in 100-pip range is at equilibrium
- 72% of pending commands are set to sell the Euro
- Upcoming events: Eurogroup Meetings, German Buba Monthly Report
The US Dollar was slightly weaker against the Euro in the wake of the country's real estate market data. The EUR/USD exchange rate added 6 pips to touch the intraday high of 1.2265.
Building permits were down 0.1% to a 1.30M units rate in December, adding to a total 4.7% rise to a rate of 1.26M units in 2017, the strongest level in ten years. The reports also revealed that the US homebuilding activity decreased more than anticipated by the end of 2017 to mark its largest drop in just a year, due to a steep fall in the single-family housing units construction. Housing starts dropped 8.2% to a seasonally adjusted yearly rate of 1.19M units, which is expected to be transitory amid solid demand for housing, driven by a strong labour market.
Quiet session
This trading session should be quiet, as no significant fundamentals are to be released today. The German Bundesbank will publish its monthly report at 1100GMT; meanwhile, the Eurogroup is to hold meetings all day.
EUR/USD surpasses notable support
EUR/USD's reversal from the 1.2285 mark mid-Friday confirmed the formation of a new descending channel.The increasing strength of the bearish sentiment was apparent later in the day when the Euro tried to surpass a significant support area formed by the 100– and 55-hour SMAs and the monthly R2 circa 1.2225. Any attempt to edge lower was interrupted when the pair opened 54 pips higher in this session which was followed by a re-test of the aforementioned support.
This day is quiet in terms of fundamentals; however, political events, especially the US turmoil over government shutdown, are likely to drive the market. Technical indicators confirm that there is still some potential south, possibly down to the 200-hour SMA and the weekly S1 at 1.2150, that could be realised today.
Hourly Chart
The Euro has remained stable against the US Dollar, thus showing no changes to its positioning since last week when it started to fluctuate around the monthly R2 at 1.2230.
Daily technical indicators demonstrate that that the rate could till appreciate up to the weekly R1 during this week; however, bears should soon take over the market. In addition, the rate's inability to edge higher also suggests that the bearish sentiment could strengthen in the medium term.
Daily Chart
Market sentiment is bearish
The bearish market sentiment has increased by one percentage point on Friday with 74% short positions (+2%).
In the meantime, the outlook for the two currencies against the rest of the traded financial instruments is the following: the Euro is 72% bearish and the US Dollar is 64% bullish.
OANDA traders are bearish, as 62% of open positions are short (unchanged from Friday). SAXO Bank clients are likewise bearish on the pair with 60% short positions (-2%).
Spreads (avg, pip) / Trading volume / Volatility