- SWFX market sentiment is 65% bullish today
- 53% of pending orders in the 100-pip range are set to SELL
- No data releases on Tuesday
On Tuesday morning the EUR/USD pair was surging, as the break out, which was speculated on Monday had occurred. In addition, the surge extended itself more than it could have been expected, as a dominant resistance of the hourly chart was broken.
The Greenback weakened against the European Single Currency, following the United States Building Permits release on Thursday at 12:30 GMT. The EUR/USD currency pair 1 minute candle gained only 4 pips, or 0.03% at the release time, but combined with the buying action occurring before the data was released, there was a surge of 17 pips or 0.15% in total.
The Census Bureau released US Building Permits data that came in line with expectation of 1.30 Million. There was no change between actual and forecasted data this time.
Scott Volling, principal at PricewaterhouseCoopers said: "June appeared to be an anomaly, but July results indicate a trend. With permits still fairly solid, we will need to see if the trend continues into the late summer/early fall or if recent permits translate to stronger starts in the coming months ".
Empty day for fundamentals
Monday's and Tuesday's economic calendars are empty. It is the third week of the month. Due to that reason it is no surprise that there are no data releases scheduled.
Meanwhile, note that on Wednesday there will be rather important data releases occurring. Namely, the Canadian Retail Sales are expected to cause almost 70 pip move on the USD/CAD. Moreover, the US Crude Oil inventories are expected to give the usual half a dollar bounce to one or the other side.
EUR/USD surges to 1.1550
Following a rather still morning, the Euro hit the 55-hour SMA at 1.14 mid-Friday and consequently accelerated 132 pips until Tuesday morning when EUR/USD tested the weekly R2 near 1.1550. This strong appreciation pushed the rate out of two channels, the most senior of which was formed mid-July.It is likely that the Euro tries to make a retracement from the breached one-month channel. The same bearish signals are given by technical indicators which should ease a bit from the overbought territory. Today's downside target is the breached channel line, the 55-period (4H) SMA and the 50.00% Fibonacci retracement at 1.1450.
In case of a surge, bullish gains are unlikely to exceed the monthly S1 at 1.1580. This move north should then be followed by a price decline down to the aforementioned area.
Hourly Chart
The currency exchange rate still remains in the boundaries of a dominant descending channel pattern. Watch its upper trend line, which might provide the needed resistance to stop the surge and force the Euro down against the US Dollar.
Daily chart
Open positions of the Swiss Foreign Exchange remain long. Namely, 65% of all open positions are long. This indicates that the short term Swiss affiliated traders are riding the surge upwards.
Meanwhile, 60% of Swiss trader set up orders are set to sell. These orders are considered normal, as all of the long positions have a take profit and stop loss orders. Moreover, some might be looking for a retracement downwards that would occur after the surge.
Although, by looking at the more long term oriented brokerages, a different picture can be observed. OANDA traders are almost neutral, as 52% of open positions are short at the brokerage. In addition, Saxo Bank traders are 51% short on the EUR/USD.
Spreads (avg, pip) / Trading volume / Volatility