- SWFX market sentiment is 64% bullish today
- 54% of pending orders in the 100-pip range are set to SELL
- No notable Fundamental Events until Wednesday
On Monday, the EUR/USD was trading in the range between 1.16 and 16.50 levels. However, it could be observed on the hourly chart that the currency exchange rate will surge, as the hourly simple moving averages approach the pair.
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."
No data until Wednesday
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 bounces off senior trend line
The US Dollar depreciated against the European Single Currency on Monday morning, as the rate bounced off the senior channel at 1.16. The total downtrend had lost 0.45% since Monday's early morning. During Friday's trading session the currency pair gained 1.00% in total, breaking through the senior channel.We can observe that the European Single Currency was trading in an uptrend during the last two weeks, passing the weekly PP at 1.1552. Today, the main currency pair was near the 1.16 mark in the morning hours. The nearest support level is the monthly S1 at 1.1581, while the nearest resistance level is the monthly PP at 1.1686.
Hourly Chart
On the daily chart one can spot that the upper trend line of a dominant descending channel has been broken. The deed was done by the medium term descending channel pattern, whose upper trend line was being tested on Tuesday.
Note that the breaking of the dominant pattern occurred due to the head of the Federal Reserve giving a speech at the Jackson Hole Symposium. If the momentum from the fundamental event remains, the just drawn descending pattern could also be broken.
Daily chart
On Monday, Swiss Foreign Exchange Traders, which are mostly short term oriented, still long o the EUR/USD. Namely, 64% of all open 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 54% short on the pair and Saxo Bank traders are also 54% 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