- SWFX market sentiment is 75% bearish (+1%)
- 55% of pending orders in 100-pip range are to buy the Greenback
- 75% of pending commands are set to sell the Euro
- Upcoming events: German ZEW Economic Sentiment, WEF Annual Meetings, ECOFIN meetings
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.
Muted session
Germany is set to release its ZEW Economic Sentiment at 1000GMT. Meanwhile, the World Economic Forum is starting today in Davos, as well as ECOFIN meetings are likewise taking place in this session.
EUR/USD returns near notable support
The Euro remained stable against the US Dollar during the previous session. The expected decline was restricted by a massive support cluster in the 1.2250/25 area.However, the pair has likewise failed to overcome the 1.2270 mark, thus confirming the upper boundary of a one-week descending channel. It showed low volatility early today, as the 55– and 100-hour SMAs limited any attempts to edge lower.
The Euro's movement during the previous sessions demonstrates that bears are restlessly trying to push the rate below this massive support. Thus, it is more likely that the pair remains tended southwards in this session.
Given the strength of this support, the rate might continue its movement sideways. Upside target for today should be the weekly R1 at 1.2305.
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 75% bearish and the US Dollar is 64% bullish.
OANDA traders are increasingly bearish, as 65% of open positions are short (+3%). SAXO Bank clients are likewise bearish on the pair with 62% short positions (+2%).
Spreads (avg, pip) / Trading volume / Volatility