- SWFX market sentiment is 60% bullish
- 52% of pending orders in the 100-pip range are to SELL the Euro
- Upcoming fundamental events: Eurozone's Flash Manufacturing PMI and Flash Services PMI
Technical indicators suggest that bears might continue dominate the pair today.
The Greenback strengthened against the European single currency, following the US Retail Sales data release. The EUR/USD currency pair lost 10 pips, or 0.12%, to continue fluctuating in the 1.7088 area.
The Census Bureau released monthly Retail Sales data that came out better-than-expected of 0.5%, compare to forecasted 0.4%.
Pablo Piovano, an Economist from FXStreet, said: "In addition, the NY Empire State manufacturing index came in above expectations at 22.60 for the current month, a tad lower than June's 25.00 reading. Looking ahead, spot is poised to remain under scrutiny in light of headlines from the Trump-Putin meeting and the upcoming testimonies by Fed's J.Powell on Tuesday and Wednesday."
Quiet day
No important data releases are scheduled for today. Markit is set to publish the Flash Manufacturing PMI and Flash Services PMI in Eurozone for July at 0800GMT. However, these data releases are unlikely to cause any turbulence in the market.
EUR/USD tests significant support
As expected, the European common currency weakened against the US Dollar on Tuesday, pressured lower by the 23.60% Fibonacci retracement and a trend-line near 1.1750.By Tuesday morning, the pair had returned near 1.1680 and was testing a strong support cluster formed by the weekly PP and the 55-, 100– and 200 -period SMAs on the 1H and 4H time-frames.
If this significant support is breached, it should work as a strong bearish signal that should send the Euro down to the bottom trend-line and the weekly S1 at 1.1615 this week. Technical indicators are more in favour of this fall. In case the aforementioned support remains intact, the next target would be the 1.1750 area or the weekly R1 at 1.1785.
Hourly Chart
The massive decline which started mid-April was stopped by the bottom boundary of the senior channel a strong support level near 1.1550.
The general tendency in the long term should be northwards. In terms of resistance, it is likely that the 55-day SMA and the 38.20% Fibonacci retracement at 1.1740 provide a strong barrier in July.
Daily Chart
Bulls remain in charge
EUR/USD remains strongly bullish with 60% of open positions being long for today (+4%) . This sentiment has been fluctuating around the 60% mark for a couple of weeks now, demonstrating that traders are still expecting the Euro to strengthen against the Greenback in the medium and long term.
The outlook for the two currencies against the rest of the traded financial instruments is as follows: the Euro is 56% bullish and the US Dollar is 61% bearish.
OANDA traders have once again become bullish with 52% of open positions being long today. This number was neutral on Monday. The same situation is apparent with Saxo Bank whose clients hold 51% long positions.
Spreads (avg, pip) / Trading volume / Volatility