- SWFX market sentiment is 60% bullish today
- 52% of pending orders in the 100-pip range are set to SELL
- Wednesday has come with first notable releases
After booking a new high level against the US Dollar, the common European currency was retreating on Wednesday. Namely, the rate had almost reached the 1.1740 mark before the currency pair retreated.
The US Dollar weakened against the European Single Currency, following the US Core Durable Goods Orders data release on Friday at 12:30 GMT. The EUR/USD currency pair gained only 6 pips or 0.05% at the time of the release. The data release did not made significant changes to the whole image of the currency pair.
The Census Bureau released US Core Durable Goods Orders data that came lower-than-expected of 0.2%, compared with the forecasted 0.5% . The data release showed traders that the change in the total value of new purchase orders placed with manufacturers for durable goods was lower than expected this time.
Jerome Powell, the chairman of the Federal Reserve said: " I see the current path of gradually raising interest rates as the [Federal Open Market Committee's] approach to taking seriously both of these risks, while inflation has recently moved up near 2%, we have seen no clear sign of acceleration above 2%, and there does not seem to be an elevated risk of overheating."
Wednesday starts the week of macroeconomic data releases
It is the last week of the month, due to that reason there are almost no notable events scheduled for the most part of the week, which might cause large fluctuations in the currency markets.
On Wednesday, the US Preliminary GDP will be released at 12:30 GMT. The data, in theory, should provide a large reaction in the financial markets. Live event cover on the Dukascopy Webinar platform by Dukascopy Analytics will start at 12:20 GMT.
On the same day the weekly US Crude Oil Inventories data release will be published at 14:30 GMT, which has given bounces of at least 0.5 USD or 50 base points throughout the summer. Although, note that two times the data release disappointed macroeconomic release traders.
The week's last notable event will be the publication of the monthly Canadian GDP at 12:30 on Thursday. This data set is set to give the largest reaction from all of the releases, as CAD GDP has been constantly giving a reaction of at least 40 base points each month on the USD/CAD.
EUR/USD books new high level
The EUR/USD has booked a new high level. Namely, the 1.1740 mark was almost reached on Tuesday. Although, the European single currency depreciated 0.26% during Wednesday's morning hours getting the rate to 1.1670 level.During the morning hours the rate had passed the support of a monthly pivot point and the 55-hour simple moving average near the 1.1680 mark. The rate was set to face the lower trend line of an ascending pattern.
It is expected that the rate might bounce off the bottom of the junior ascending channel. Meanwhile, besides the trend line, the nearest support level was the 100-hour SMA at 1.1630, while the most adjacent resistance level was the already mentioned 55-hour SMA.
Hourly Chart
The daily chart shows that the momentum provided by the speech of Jerome Powell has lasted into Tuesday. Namely, the upper trend line of another long term pattern was broken recently.
When the markets fully take in the fundamental developments, a full review of the technical charts of the EUR/USD will be conducted by Dukascopy Analytics.
Daily chart
On Wednesday, Swiss Foreign Exchange Traders, which are mostly short term oriented, were still long on the EUR/USD. Namely, 60% of all open positions were long. Previously, 61% of positions were long.
Meanwhile, all of the traders on SWFX have prepared pending trade orders, which might be executed in certain situations. Of all the take profits, stop losses, sell and buy orders 57% are set to sell the EUR/USD. This means that, if the rate increases volatility, the retail sector will push the rate down.
Other, more long term oriented FX brokerages also publish their sentiment data. They can help retail traders with understanding the market expectations for the next couple of months. For example, OANDA brokerage traders are 59% short on the pair, and Saxo Bank traders are 55% short.
All of the sentiment information provides us with the understanding of the collective market thought. Namely, the EUR/USD has still open short term long positions, which have close by stop losses and take profits that can be observed on the SWFX sentiment. Meanwhile, the longer term traders have already moved to the bear side and shorted the pair.
Spreads (avg, pip) / Trading volume / Volatility