- SWFX market sentiment is 66% bearish (-1%)
- 56% of pending orders in 100-pip range are to SELL the Euro
- 70% of total pending commands are to sell the Euro
- Upcoming events: German Buba President Weidmann to speak, US JOLTS Job Openings, IBD/TIPP Economic Optimism
The EUR/USD currency pair was not exposed strongly to the influence of fundamentals on Monday. The Greenback weakened against the European single currency 7 base points to near the 1.2400 level.
Economic activity in the US services sector was the strongest in more than 12 years, supported by rising new orders, suggesting that the economy sustained the strong momentum in the beginning of the year. The ISM survey showed that its non-manufacturing PMI jumped to 59.9 in January, from 55.9 in the prior month. The US economy kept expanding even before the stimulus from a $1.5T tax cut program has begun to filter through. However, that is likely to cause some concerns that the country's economy could overheat.
Quiet session
No significant fundamentals are scheduled for this session. The President of the Deutsche Bundesbank Jens Weidmann is going to deliver opening remarks at the Bundesbank Lecture at 0900GMT.
Meanwhile, the US Bureau of Labour Statistics is to release the JOLTS Job Openings at 1500GMT, while the US TechnoMetrica Institute of Policy and Politics will publish the IBD/TIPP Economic Optimism; the time for this release is tentative.
EUR/USD points to slight recovery after fall
Contrary to expectations, the common European currency was dominated by bearish market on Monday. Following a minor period of consolidation between the 55– and 100-hour SMAs, the pair breached the latter together with the 200-hour SMA a few hours later.This strong downside momentum resulted in the pair testing the weekly S1 and the bottom boundary of a two-month channel circa 1.2360 by Tuesday morning.
Converging technical indicators suggest that the pair should recover some losses in this session. Gains, however, are expected to be limited due to the combined resistance of the 200-, 100– and 55-hour SMAs and the weekly PP located near the 1.2440 mark. A reversal from the weekly S1 would likewise confirm a newly-formed ascending channel (dashed lines).
Hourly Chart
The common European currency continues its period of consolidation for the second consecutive session. The pair's general movement is nevertheless tended northwards. Technical indicators have managed to maintain their high positioning; however, some bearish signals are starting to appear.
Daily Chart
Market sentiment is strongly bearish
The bearish market sentiment has decreased to 66% short positions in this session (-1%).
In the meantime, the outlook for the two currencies against the rest of the traded financial instruments is as follows: the Euro is 70% bearish and the US Dollar is 60% bullish.
OANDA traders remain bearish, as 64% of open positions are short (+0%). Saxo Bank clients have decreased their short positions to 60%, compared to 64% on the previous day.
Spreads (avg, pip) / Trading volume / Volatility