EUR/USD opens green

Note: This section contains information in English only.
Source: Dukascopy Bank SA
  • SWFX market sentiment is 48% bearish
  • Trader pending orders are 62% to sell
  • Pair opened Thursday's session at 1.0629
  • Upcoming Events: EU minimal bid rate; ECB press conference; US building permits; Philly Fed manufacturing index; US Unemployment claims
Following two consecutive volatile sessions, EUR/USD acted according to plan and did not manage to weigh below the 55-day SMA of 1.0616. The pair posted a small green candle on the morning part of Thursday's trading session, while being squeezed in between the SMA and broken channel down, which can be seen on the hourly chart. We will look for the market to remain calm until 12:45 GMT when the first high impact data comes out.

Consumer prices in the Euro zone climbed to a 38-Month high in December in line with analysts' expectations, official figures revealed on Wednesday. According to Eurostat, the CPI came in at an annualized rate of 1.1%, up from a 0.6% rise in November, and a 0.2% increase registered in the same period year ago. That was the highest reading since October 2013. On a yearly basis, the so-called core CPI, which excludes food, energy, alcohol and tobacco prices, came in at 0.9%, up from the prior month' 0.8%, while underlying prices advanced 0.4%. Data also showed, the main driver of inflation rise were energy prices, which advanced 2.6% year-over-year in December, up from a 1.1% slump in the past month. In the meantime, non-energy goods prices remained low, falling to 0.3% from 0.5% in annual terms. Nevertheless, the service sector CPI edged fractionally higher to 1.3% from 1.1% in November. In addition, a report showed the inflation rate advanced amid higher prices of transport, vegetables and heating oil, which added 0.21%, 0.07% and 0.05% to the headline figure, respectively.

In the short term consumer prices are likely to fall in January due to seasonal factors. However, the inflation rate is expected to climb significantly above 1.5% going further.

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Upcoming fundamental releases: EU minimal bid rate; ECB press conference; US building permits; Philly Fed manufacturing index; US Unemployment claims

A set of high-impact data is bound to shake markets on Thursday, starting with the EU minimum bid rate at 12:45 GMT and followed by a set of other significant data just after at 13:30 GMT, when the ECB press conference kicks off and US data – building permits, Philly Fed manufacturing index as well as unemployment claims - comes out. The day will end with crude oil inventories at 16:00 GMT.



EUR/USD reaches broken channel

Daily Chart: EUR/USD erased some of Wednesday's losses in a small green candle Thursday morning, hovering between a broken short-term channel and the 55-day SMA of 1.0615. The pair is likely to experience some further volatility during the session amid high impact data announcements, meaning that levels may break both falsely and consistently. We set an ultimate ceiling at 1.0720, the upper trend-line of the senior channel up, while ground lies around 1.0580/78 with possible hitches at 1.0594 before that.

Daily chart
© Dukascopy Bank SA

Hourly chart: The hourly chart shows that various time-frame SMAs are capping the movements to the upside and that the trend could soon enter more bearish territory as the retracement from the broken channel down comes to an end. Nevertheless, the 200-hour SMA remains beneath at 1.0612 and will remind of itself in case the risk is indeed skewed even more to the downside. The gloomy sentiment could ultimately spill into the daily chart as well, suggesting that the green zone is not sustainable for today.

Hourly chart
© Dukascopy Bank SA


SWFX traders also shift to bearish side

SWFX traders have become bearish regarding the pair, as 48% of open positions are short on Thursday. In addition, 62% of trader set up orders are to sell the Euro.


OANDA traders have become bearish, regarding the pair, as 52.26% of open EUR/USD positions were short on Thursday. Meanwhile, SAXO bank traders decreased their bearish outlook, as 57.78% of open positions were short, compared to 60.62% previously.

Spreads (avg,pip) / Trading volume / Volatility



Average forecast says EUR/USD will trade around 1.0602 in April

Traders, who were questioned on their longer-term views on EUR/USD between December 19 and January 19 expect, on average, the currency pair to trade around 1.0602 by the middle of April. In addition, 46% (-1%) of participants believe the exchange rate will be generally above 1.06 in ninety days and 16% see it above 1.12. Alongside, 30% of those surveyed reckon the pair will trade below 1.02 in three months.

© Dukascopy Bank SA

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