- SWFX market sentiment is 52% short
- Pending orders in the 100-pip range are set to sell in 53% of cases
- Brexit turmoil continues and volatility is high
The turmoil in the United Kingdom affects the strength of the Euro. Namely, as the UK Parliament triggered a confidence vote in Theresa May, the currency exchange rate plummeted. This vote can get rid of all the progress made in making a Brexit deal.
The European Single Currency appreciated against the US Dollar, following the US Employment data sets release on Friday at 13:30 GMT. The EUR/USD exchange currency rate gained 33 pips or 0.29% during a minute, right after the release. The European Single Currency kept going upwards after the data release to continue trading at the 1.1374 area against the US Dollar.
The Bureau of Labor Statistics released Non-Farm Employment Change data lower-than-expected of 155K compared with forecasted 198K. Note, that the Average Hourly Earnings and the Unemployment Rate were released at the same time with the Non-Farm Employment Change.
The Bureau of Labor Statistics commented, "Total nonfarm payroll employment increased by 155,000 in November, and the unemployment rate remained unchanged at 3.7 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, in manufacturing, and in transportation and warehousing."
Brexit turmoil overshadows all fundamental releases
Before watching any data release that usually impacts the Forex Markets, note that the Brexit fundamentals are overshadowing all data releases. Namely, data causes no reaction in the currency rates during this month.On Wednesday, the US Consumer Price Index change will be published at 13:30 GMT. The event is expected to cause around 20 pip reaction on the EUR/USD.
Note that on Wednesday the biggest move that can be caught will occur on the oil price benchmarks. Namely, at 15:30 GMT the US Crude Oil Inventories data release will cause a sudden move of more than one percent.
On Thursday, the attention will be taken by central bank rate announcements. Namely, at 08:30 GMT the Swiss National Bank will publish their rate and at 12:45 the ECB will publish their interest rate.
The last day of the week will have two notable data releases. At 09:00 GMT the European Manufacturing and Services PMI's created by Markit will be published.
Afterwards, the US Retail Sales data sets will be out at 13:30 GMT. The event might cause a 20 pip bounce.
All of the above mentioned data releases will be covered by Dukascopy Analytics. The events can be watched either on the bank's webinar platform or on our YouTube channel.
EUR/USD daily review
The rate plummeted in the second half of Tuesday's trading session, as bad news from the UK came in. Although, the descent started after the EUR/USD attempted to pass the psychological resistance of 1.14.However, the descent beat the rate down to the levels near the 1.1300 mark. In general, after the descent the rate began to slightly recover. The rate was set to meet resistance at 1.1350.
Meanwhile, note that most likely data from the UK will continue to impact the currency exchange rate and cause large swings that will break technical patterns.
Hourly Chart
The daily chart's junior pattern has bene broken. It signals that there might be another surge in the borders of the larger patterns until the rate reached the upper trend line of the most dominant pattern.
Although, that can happen in more than a couple of ways. Horizontally, by surging upwards or by trading in zig-zags for the next couple of months.
Meanwhile, take into account that the resistance of the 55 and 100-day simple moving averages respectively at 1.1430 and 1.1510 will be providing resistance to a possible surge.
Daily chart
Traders remain bearish, as 52% of orders were short since Tuesday morning.
Meanwhile, trader pending orders in the 100-pip range were set to sell in 54% of cases. The orders had been set up on Tuesday.
In general, some traders profited from the decline of the EUR/USD. Although, it seems that it was unintentional, as most market participants did not expect the recent events at the British Parliament.