- SWFX market sentiment is 64% bearish (-2%)
- 53% of pending orders in 100-pip range are to SELL the Euro
- 69% of total pending commands are to sell the Euro
- Upcoming events: FOMC Members Dudley and Williams to speak
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
This trading session is expected to be relatively calm, as only two speeches by FOMC members are on agenda. The President of the Federal Reserve Bank of New York William Dudley will speak about banking culture at a joint Thomson Reuters / the European American Chamber of Commerce event at 1330GMT; while his counterpart in San Francisco John Williams is due to speak at a community leaders luncheon at 2230GMT.
EUR/USD tests 55-hour SMA
EUR/USD demonstrated high volatility in both directions during the previous session, as it was fluctuating within the bounds of 1.2335/1.2419. The upper barrier was provided by the 55-, 100– and 200-hour SMAs and the weekly PP, while the 23.60% Fibo retracement restricted the pair from below.The slight upward movement during the Asian session suggests that the Euro might be tended north today. Gains, however, should be capped near the 1.2430 mark, as bulls are unlikely to surpass the massive resistance cluster located nearby.
If the previous volatility still persists in the market, traders could expect the pair to remain in the same range as yesterday or even fall down to the monthly PP at 1.2289. Technical indicators favour the bullish scenario.
Hourly Chart
Bulls and bears showed equal force on Tuesday, as the Euro closed the session with a minor 10-pip gain against the US Dollar. The pair has maintained the same trading range between the weekly PP and S1 in this session, as well; however, the strong resistance cluster circa 1.2425 apparent on the hourly chart is likely to push the rate southwards.
Daily Chart
Market sentiment is strongly bearish
The bearish market sentiment has decreased to 64% short positions in this session (-2%).
In the meantime, the outlook for the two currencies against the rest of the traded financial instruments is as follows: the Euro is 69% bearish and the US Dollar is 59% bullish.
OANDA traders remain bearish, as 65% of open positions are short (+1%). Saxo Bank clients have increased their short positions to 62%, compared to 60% on the previous day.
Spreads (avg, pip) / Trading volume / Volatility