- SWFX market sentiment is 60% bearish (-4%)
- 58% of pending orders in 100-pip range are to SELL the Euro
- 52% of total pending commands are to sell the Euro
- Upcoming events: German Buba President Weidmann to speak, US Unemployment Claims
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
Similarly to yesterday, no important fundamentals are scheduled for this session. The President of Deutsche Bundesbank Jens Weidmann is due to deliver a speech "Monetary Policy in the European Context" at the Monetary and Economic Policies on both sides of the Atlantic conference.
Meanwhile, the US Department of Labour will release the weekly unemployment claims at 1330GMT.
EUR/USD falls down to 1.2250
As previosuly expected, the 55-hour SMA at 1.24 was an unbreakable resistance for EUR/USD which allowed bears to resume dictating the market direction. The pair hindered slightly near the lower boundary of the two-month ascending channel and the 23.60% Fibo retracement located near 1.2345, but was nevertheless pushed down to the weekly S2 where it was trading on Thursday morning.Technical indicators are gradually recovering from their lows, thus pointing to a possible surge in this session. It is expected that the Euro tries to form a retracement from the breached channel circa 1.2350. This area, likewise reinforced by the 55-hour SMA, the 23.60% Fibo and the weekly S1, is likely to be the top for today.
In case the weekly S2 is breached, losses should be limited at 1.2225.
Hourly Chart
The common European currency was driven by strong downside risks on Wednesday, thus closing the day with a 113-pip decline in price.
Meanwhile, the pair began this session with minor consolidation. Even though this may point to a short-term period of appreciation, the general trend within the remaining trading week should be southwards.
Daily Chart
Bears become weaker
The bearish market sentiment has decreased to 60% short positions in this session (-4%).
In the meantime, the outlook for the two currencies against the rest of the traded financial instruments is as follows: the Euro is 64% bearish and the US Dollar is 57% bullish.
OANDA traders have decreased significantly their bearish sentiment in this session, as 57% of open positions are short (-8%). Saxo Bank clients have reduced their short positions to 57%, compared to 62% on the previous day.
Spreads (avg, pip) / Trading volume / Volatility