- SWFX market sentiment is 74% bearish (-1%)
- 51% of pending orders in 100-pip range are to buy the Euro
- 53% of total pending commands are set to buy the Euro
- Upcoming events: EU Minimum Bid Rate and US Advance GDP
The decline of the US Dollar had continued by Wednesday morning. Namely, during the early hours of Wednesday's trading session the currency exchange rate had reached the 1.2330 mark.
The Euro strengthened against the US Dollar, reflecting the unexpectedly upbeat ZEW sentiment report. The EUR/USD exchange rate added 12 base points to get back into the 1.2250 area.
Germany's investors showed the strongest confidence in eight months, representing an optimistic tone for the economy entering 2018. The Mannheim-based ZEW Institute report revealed on Tuesday that the German Economic Sentiment Index rose to 20.4 points in January, following 17.4 in the last month of 2017.
Quiet until Thursday
There are no notable date releases set for Wednesday, which might affect the EUR/USD currency pair. However, swing traders should begin the preparation for two events of the utmost importance. One of them will occur on Thursday and the second on Friday.
On Thursday expect the release of the ECB Minimum Bid Rate at 12:45 GMT. It will be followed by the ECB Press Conference at 13:30 GMT.
On Friday tune in to the Dukascopy webinar platform to watch live the coverage of the release of US Advance GDP and US Core Durable Goods Orders. This data release is surely going to cause a fluctuations in all of the USD currency pairs. The release is scheduled for 13:30 GMT.
EUR/USD tests weekly R1
EUR/USD was trading in bullish market on Tuesday. Following a slight period of decline early in the session, the common European currency reversed from the combined support of the 55– and 100-hour SMAs and the weekly circa 1.2235 and surged 90 pips within the following hours.As a result, the pair had reached the 1.2315 mark at the time of this analysis. The aforementioned support area restricted the pair from initiating a new wave down; thus, the descending channel which was formed on January 14 was breached to the upside.
It is still likely that the pair edges higher for several hours until the upper boundaries of both the senior and junior channels is reached circa 1.2360. The Euro should subsequently make a correction south towards 1.2250.
Hourly Chart
The daily chart shows one important fact. The rate is set to continue its surge only hindered by pivot points and the trend lines of short term and medium term pattern resistance lines.
That way the currency exchange rate should continue until it reaches the 1.26 mark, where the 61.80% Fibonacci retracement level is located at. The retracement levels are measured by connecting the 2016 low level and the high level of 2014.
Daily Chart
Market sentiment is bearish
The bearish market sentiment has decreased by one percentage point with 72% 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 65% bullish.
OANDA traders are increasingly bearish, as 61% of open positions are short (-4%). SAXO Bank clients are likewise bearish on the pair with 59% short positions (-3%).
Spreads (avg, pip) / Trading volume / Volatility