- SWFX market sentiment is 59% bearish
- Trader pending orders are 58% bearish
- Pair opened Friday's session at 1.0873
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Upcoming Events: EU CPI Flash Estimate; US Advance GDP; US Chicago PMI; US Revised UoM Consumer Sentiment; FOMC Member Brainard's Speech; FOMC Member Harker's Speech
During the early hours of Friday's trading session the EUR/USD currency exchange rate remained in limbo around the levels of significance near the 1.0880 mark. First of all the markets are still in the expectations of the final results of the French election. However, from a technical viewpoint the currency pair has bounced off a dominant ascending channel's upper trend line and has formed a short term descending channel.
As markets expected, the European Central Bank left its monetary policy unchanged at its meeting on Thursday as inflation remained below its 2% target. Although, the ECB acknowledged strong economic growth, with the economy showing the best growth rate since the global financial crisis. Nevertheless, the Central bank said that further rate cuts and an increase in asset purchases remained on the table despite Germany's calls for a stimulus reduction. The ECB President Mario Draghi stated that last month's data confirmed the view that the economy was in a good shape and downside risks continued to fall over the past several months.
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Upcoming events: Various data with US GDP on top
Friday is a busy day for macroeconomic data watchers, as there are various interesting data sets scheduled for publication. First of all the EU CPI data will be published at 09:00 GMT. In the second half of the day data from the US will begin to pour in with the most important at the start. US Advance GDP and Employment Cost Index are set to be out at 12:30 GMT. Afterwards, at 13:45 GMT the Chicago PMI will be published. Fifteen minutes later, at 14:00 GMT, the Revised UoM Consumer Sentiment will be released. Later in the day the member of the FOMC will speak, as Brainard will give a speech at 17:15 GMT, and Harker is set to speak at 18:30 GMT.
Read More: Fundamental Analysis
EUR/USD trades below resistance
On Friday morning the common European currency had retreated below the combined resistance of the weekly R2 and monthly R1 near the 1.0880 level against the US Dollar. Due to the fact that the pair bounced off the long term resistance during this week, this can be considered the start of a medium term decline. The currency exchange rate is likely to decline by the end of the day to the combined support of the 200-day SMA, which is located at the 1.0837 mark, and the 38.20% Fibonacci retracement level at 1.0826.
Daily chart
The hourly chart reveals that there is a new descending short term channel, which is guiding the currency exchange rate lower. Most recently it showed signs that it will begin to ignore the mentioned combined resistance of the weekly R2 and the monthly R1. Meanwhile, the 55 and 100-hour SMAs are set to provide additional resistance to the currency pair near the 1.0890 mark.Hourly chart
Read More: Technical Analysis
Market sentiment strongly bearish
SWFX traders remain bearish, as 59% of open positions are short, and 58% of trader set up orders are to sell the Euro.
OANDA traders remain bearish, as 62.10% of trader open positions are short on Friday, compared to 62.45% previously. Moreover, SAXO bank clients also remain bearish, as 61.94% of open positions are short, compared to the 65.08% positions on Thursday.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.08 by August
© Dukascopy Bank SATraders, who were questioned on their longer-term views on EUR/USD between March 28 and April 28 expect, on average, the currency pair to trade around 1.08 in the end of July. In general, 57% (+4%) of participants believe the exchange rate will be above 1.08 in ninety days, and 23% (+1%) see it above 1.12. In the meantime, 7% of those surveyed reckon the pair will be at parity or below.