- SWFX market sentiment is 60% short
- Pending orders in the 100-pip range are 60% to sell
- Watch the weekly economic calendar review
On Monday the EUR/USD traded just below the 1.1450 level. The rate was located above a strong technical support cluster at the 1.1400 level. In general, the trading session was expected to experience a quiet and slow surge.
The European Single Currency depreciated against the US Dollar, following the US FOMC Meeting Minutes release on Wednesday at 19:00 GMT. The EUR/USD exchange currency rate lost 34 pips or 0.30% during a minute, right after the release. The European Single Currency continued trading at the 1.1370 area against the US Dollar.
The Federal Reserve releases US FOMC Meeting Minutes where fed officials provide in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates.
The key highlight from the official statement, "Fed raises target interest rate to 2.25-2.50 pct, reduces expected hikes for 2019 to two from three."
Next up for macro traders – Canadian Trade Balance
There are notable macroeconomic and monetary events taking place this week that are scheduled to be covered by Dukascopy and are expected to cause fluctuations in the Forex market.First up on Tuesday the Canadian Trade Balance will be published at 13:30 GMT. The event is expected to cause a bounce from 10 to 35 base points.
Afterwards, Wednesday will be the busiest day of the week for macroeconomics. At 15:00 GMT the Bank of Canada will publish its Overnight Rate. The bank is set to hike their interest rate from 1.75% to 2.00%. Due to that reason the USD/CAD is expected to fall at least 50 base points.
Afterwards, take into account that the big once per week move on oil due to US Crude Oil Inventories is scheduled to occur at 15:30 GMT. During the past month oil prices bounced from 40 to 80 cents per barrel on the announcement.
The busy day will end with the FOMC Meeting Minutes publication at 19:00 GMT. During the event the market usually does not fluctuate. However, surprises are possible.
Last but not least will be the releases on Friday. UK GDP and Manufacturing Production are expected to cause a 20 pip move at 09:30 GMT. At 13:30 GMT the US CPI and Core CPI data sets might cause a 10-30 pip move.
EUR/USD daily review
The European Single Currency was supported by the 200-hour simple moving average together with the monthly pivot point at the 1.1408 level during the morning hours of the second Monday of 2019.The currency exchange pair continues recovering from the dramatic drop of 187 pips or 1.62% which hurt the rate during the first week of 2019. It seems that the rate will be trading sideways to stay at the 1.1420 level during the trading day.
However, the European single currency could break the resistance level of the 50.00% Fibo at the 1.1462 mark during today's US ISM Non-Manufacturing PMI data release at 15:00 GMT.
Hourly Chart
On the daily chart the recent surge has been charted in an ascending pattern.
In general, on a larger scale, the rate could reach for the upper trend line of the most dominant descending channel pattern by surging during the next couple of months.
Such a forecast is consistent with the fact that the European Central Bank intends to tighten their monetary policy next year. Meanwhile, the US Federal Reserve is signalling that their monetary tightening will be less than it was planned previously.
Daily chart
On Monday, traders were shorting the EUR/USD in 60% of all cases. Namely, six out of ten traders on the Swiss Foreign Exchange had open short not long positions.
Meanwhile, trader pending orders in the 100-pip range were set mostly to sell the pair. 61% of pending orders were set to sell.
In general, traders were short since the middle of the last week. Moreover, traders are prepared to open more short positions, as indicated by the pending orders.