- SWFX market sentiment is 53% bullish today
- Pending orders in the 100-pip range are neutral
- Next notable data incoming at 13:30 GMT on Wednesday
As the EUR/USD extended its decline on Monday, the currency exchange rate reached the 1.1215 level and broke a large scale descending pattern.
The European Single Currency appreciated against the US Dollar, following the US Federal Funds Rate release on Thursday at 19:00 GMT. The EUR/USD exchange currency rate gained 10 pips or 0.09% during a minute, right after the releases. The European Single Currency continued trading at the 1.1370 area against the US Dollar.
The Federal Reserve released US Federal Funds Rate that came out in line with expectation of 2.25%. In addition, the FOMC Statement data release came out on Friday at 19:00 GMT.
Marc Chandler, chief market strategist at Bannockburn Global Forex comments "Fed says little and does less. Recognizes strong economy and acknowledges moderation of business investment, with inflation near target. Nothing to do. No hint at money market pressures or weakness in housing. FOMC to market: See you in December. Gradual hikes to continue."
First US data will be released on Wednesday
On Wednesday, there are two data releases that are set to be covered. Namely, at 09:30 GMT the UK CPI will be published. Afterwards, at 13:30 GMT the US CPI and Core CPI data sets will be released.Thursday will be the last day with notable data releases. At 09:30 GMT the British will publish their retail sales data. Afterwards, at 13:30 GMT the US statisticians will publish their retail sector data.
For more in-depth analysis of this week's fundamental economic events watch the weekly Monday's Poking the Economic Calendar webinar, which is live each Monday at 12:00 both on Dukascopy telefision and YouTube.
EUR/USD daily review
In regards to the near-term future, most likely, the currency exchange rate will trade sideways between the weekly S1 at 1.1270 and the 61.80% Fibo at 1.1200. The 55-hour SMA will catch up from the upside to the rate to give additional resistance.On the other hand, the predictions for the currency pair could be broken due to today's US FOMC Member Brainard Speech at 15:00 GMT.
Hourly Chart
The previously active descending pattern of the daily chart has been broken during the drop on Monday after being paused initially.
Meanwhile, note that simultaneously the chart shows and adjusted pattern, whose lower trend line is located below the 1.1200 mark.
Daily chart
Since Monday, 53% of Dukascopy traders were bullish on the pair. The neutral sentiment had established itself after the US elections.
Meanwhile, traders are still prepared to sell the EUR/USD, as 56% of all trader set up orders are bearish.
Previously, our analysts noted that traders were ready to sell the pair, if it passes the 1.13 mark. As the drop to almost 1.12 has occurred, traders have not opened a large amount of short positions. This indicates that the drop did not occur due to the retail sector.