- SWFX market sentiment is 61% bearish
- Trader pending orders are 55% to sell
- Pair opened Wednesday's session at 1.0809
- Upcoming Events: US Existing Home Sales
US industrial production was unchanged last month, while market analysts anticipated an increase, official figures revealed on Friday. The Federal Reserve reported factory production came in at 0.0% in February, falling behind analysts' expectations for a gain of 0.3%. Meanwhile, January's initially reported drop of 0.3% was revised to a 0.1% fall. However, manufacturing production, which accounts for 75% of overall industrial output, posted a 0.5% increase in February that matched the preceding month's rise. A global economic recovery, stronger business investment in equipment and appropriate inventory levels allowed manufacturers to gain momentum over the last several months.
The advance in manufacturing output was in line with analysts' forecasts. Data also showed utility output decreased 5.7%, following a 5.8% decline in January. The fall was mainly driven by unusually warm temperatures. Mining production rose 2.7% last month, boosted by oil and gas drilling. Business equipment output advanced 0.7% in February, compared to a 0.1% decline registered in the prior month, whereas production of construction supplies increased 1.3% after climbing 1.4% in January. Other data released on Friday showed mood of American shoppers jumped to 97.6 in March, according to the preliminary reading released by the University of Michigan.
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Upcoming events: US Existing Home Sales
Wednesday's trading session is set to be a quiet day for fundamental event traders, as there is only one minor data release scheduled for the day. It will be the US Existing Home Sales data, which is set to be published at 14:00 GMT. Moreover, it is highly unlikely that a divergence from the priced in average market forecast will cause volatility in the strength of the US Dollar.
Read More: Fundamental Analysis
EUR/USD stops at 1.08 mark
Daily Chart: During the early hours of Wednesday's trading session the common European currency against the Greenback fluctuated just below the weekly R1, which is located at the 1.0814 level. The weekly resistance is strengthened also by the 38.20% Fibonacci retracement level at 1.0826. The currency pair surged on Tuesday and gained almost 0.7%. Due to that factor it can be assumed that this is a minor consolidation of positions before the surge continues. It is possible that the rate retreats back down to the monthly R1 at 1.0772 before it attempts to break the before mentioned resistance levels.Daily chart
© Dukascopy Bank SA
Hourly chart: The hourly chart reveals that the weekly R1 is keeping the rate lower for at least 20 hours. However, it seems not to be able to force it lower, as only after around 15 hours the rate bounced off the resistance only to find support in the 20-hour SMA and make another attempt at the weekly R1. That means that the rate is likely set break the resistance.
Hourly chart
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Read More: Technical Analysis
Markets remain bearish
SWFX sentiment remains bearish, as 61% of open positions are short on Wednesday. Moreover, 55% of trader set up orders are to sell the Euro.
OANDA traders are clearly bearish, as 62.71% of trader open positions are short on Wednesday, compared to 59.85% positions previously. In addition, SAXO bank clients also remain on the bearish side, as 65.48% of open positions are short, compared to 61.84% on Tuesday.
Spreads (avg,pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.06 in April
Traders, who were questioned on their longer-term views on EUR/USD between February 22 and March 22 expect, on average, the currency pair to trade around 1.06 by the start of April. In general, 53% (-1%) of participants believe the exchange rate will be generally above 1.06 in ninety days, and 18% see it above 1.12. In the meantime, 19% (-1%) of those surveyed reckon the pair will be at parity or below. © Dukascopy Bank SA