- Traders are bearish with 58% short positions (+1%)
- 55% of pending orders in 100-pip range are to SELL the Euro
- Upside potential up to 1.25
- Upcoming events: ECB M3 Monetary Supply y/y, CB Consumer Confidence, FOMC Member Bostic to speak
The Greenback strengthened against its European counterpart, following the US core durable goods orders data released on Friday. The EUR/USD currency pair lost 17 pips, or 0.14%, to continue fluctuating in the 1.2336 area.
The Census Bureau reported that the country's core durable goods orders came in better than expected, posting 1.2% uptick in February and surpassing the forecast of a 0.5% surge. One of the main reasons for this rebound was the increase in shipments of core capital goods. Moreover, non-defense capital goods orders recorded the biggest increase in five months. This surge indicates that business spending is set to continue.
CB Consumer Confidence
The European Central Bank is set to publish data on M3 Monetary Supply in the Euro zone at 0800GMT.
The US Conference Board will release its consumer confidence index at 1400GMT. Analysts forecast a reading of 131.2, compared to 130.8 during the preceding month. Meanwhile, the President of the Federal Reserve Bank of Atlanta Raphael Bostic is due to speak at the Hope Global Forum's Annual Meeting at 1500MT.
EUR/USD breaches medium-term pattern
Despite receding fears of trade wars, the US Dollar failed to pick up momentum on Monday, thus allowing EUR/USD to breach the psychological 1.24 level and reach a new six-week high of 1.2450The rate managed to breach the monthly R1 and a medium-term channel along the way. Further advance, however, did not follow, as the pair remained located slightly below the weekly R2.
From technical point of view, the last few trading sessions show that the Euro has initiated a new wave up after reversing from the senior channel on March 20. This suggests that the Euro could continue climbing even further this week. However, bulls might allow for a slight correction south down to the 1.24 area today.
In case bulls continue to dominate, upside target is 1.2550 which has provided strong support beforehand.
Hourly Chart
EUR/JPY has been trading sideways since early March, as the strong support of the 55-day SMA has not allowed the pair to move below the 1.22 mark.
The Euro might still push slightly higher towards the weekly R1 and the upper boundary of the junior channel this week. However, the general direction should nevertheless remain south to eventually breach the senior channel and test the 100-day SMA and the monthly S1 at 1.2070.
Daily Chart
Sentiment strongly bearish
The number of short positions of EUR/USD has increased by one percentage point to 58%.
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.
The bearish sentiment of OANDA traders is standing at 61% short positions today (+1%). Saxo Bank clients share the same percentage of short positions today (+1%).
Spreads (avg, pip) / Trading volume / Volatility