- SWFX market sentiment is 60% bullish today
- 55% of pending orders in the 100-pip range are set to SELL
- Only Canadian data releases on Wednesday
The EUR/USD declined down to the previous target and touched it, as it was expected previously. On Wednesday, the currency exchange rate remained near the targeted 1.1550 mark after a surge that was caused by the support levels near that mark.
The European Single Currency weakened against the US Dollar, following the US Prelim GDP data release last Wednesday at 12:30 GMT. The EUR/USD currency pair lost only 6 pips or 0.05% at the time of the release but the whole drop totalled 10 pips or 0.09%.
The Bureau of Economic Analysis released the US Prelim GDP data that came better-than-expected. Namely, the GDP grew by 4.2%, compared with the forecasted 4.0%. The data release showed that the US currency should be more demanded than previously though.
Canadian data and interest rate in focus
On Wednesday, only the Canadian government and central bank will release data that will be notable enough for it to be monitored by Forex traders.
Namely, the Canadian Trade Balance will be published at 12:30 GMT and the Bank of Canada will publish their Overnight Rate at 14:00 GMT. Both data releases will be covered by Dukascopy Analytics. The data coverages will begin ten minutes before the data is released, respectively, 12:20 GMT and 13:50 GMT.
Meanwhile, note that most major financial instruments will start suddenly bouncing around on US macroeconomic data releases on Thursday, as the ADP Non-Farm Employment Change will be released at 12:15 GMT and the ISM Non-Manufacturing PMI will be out at 14:00 GMT.
Moreover, it will continue into Friday. On Friday, at 12:30 GMT three US employment data sets will be published.
EUR/USD short term review
In regards to the near future, the Euro is set to fluctuate between the resistance of the 55-hour simple moving average at 1.1590 and the support of two pivot point levels near the 1.1550 mark.Watch the two levels for possible break outs. If the SMA gets broken, the 1.1620 mark will be reached. If the pivot points get passed, the rate will face a supporting trend line near the 1.1530 level.
Hourly Chart
After reviewing the daily chart the most dominant pattern was spotted. It is a massive scale descending channel pattern, which has been guiding the rate downwards since February. The recent surge provided the needed reference point to properly drawn the just mentioned channel.
On the chart one can observe that the recent surge represents the pair's first move in the aftermath of the announcement of Jerome Powell. This move most likely is the first one in the borders of a large scale pattern. The large scale pattern will be junior to the already mentioned dominant pattern and show a swing in the borders of the larger pattern.
Daily chart
Swiss retail market trader sentiment, which is mostly short term oriented, was 60% long on Wednesday. Most likely, the fast reacting retail traders had already begun to open the long positions in expectations of a reversal in the aftermath of the large decline.
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 60% 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 55% short on the pair, and Saxo Bank traders are 53% 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