- SWFX market sentiment is 63% bearish
- Trader pending orders are neutral
- Pair opened Tuesday's session at 1.0864
- Upcoming Events: CB Consumer Confidence; FOMC Member Kaplan's Speech
In March, the German Business Climate Index rose more than many experts estimated. It surged to 112.3, appearing to be the highest since June 2011. Such notable change suggests that German businesses have finally adapted to the new US Administration and are not disturbed by the US President Donald Trump's plan to levy a 35% border tax on German car manufacturers or his $375 billion bill for NATO handed to the German Chancellor Angela Merkel. The positive rise of business confidence also shows that companies calmly perceive the upcoming elections in France and Germany and the already conducted elections in Netherlands. Altogether, this allows to assume that the German economy is relatively indifferent to the current political turbulences across the world.
Nevertheless, the reason for such unexpected surge was also based on economic grounds. In particular, improvements in the manufacturing, construction and retailing sectors that were fueled by higher demand for cars and machinery. Moreover, with respect to the construction industry, sentiment in the following sector reached the highest level in 26 years amid positive demographics, spiking wages and lower borrowing costs, which altogether created a housing boom.
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Upcoming events: Consumer confidence and FOMC
During Tuesday's trading session there is something set to occur during this quiet first half of the week. CB Consumer Confidence indicator will be released at 15:00 GMT. However, there is a problem with this data release. Many economic calendars show it as a high importance release. Although, for years the Dukascopy research team has not seen it impacting the financial markets via the strength of the US Dollar. Traders might rather want to listen to the speech of FOMC member Kaplan at 18:00 GMT.
Read More: Fundamental Analysis
Euro retreats on Tuesday
Daily Chart: On Tuesday morning the common European currency was in a retreat against the Greenback, as the currency exchange rate fluctuated near the 1.0850 mark. Previously, during Monday's trading the rate surged and touched the 1.0905 level, and with it a long term ascending channel's upper trend line was confirmed, as the pair bounce off of it. It is most likely that the currency pair will get squeezed in during today's trading session, as the 200-day SMA is moving in from the upside while the weekly R1 and the 38.20% Fibonacci retracement level are providing support, respectively, at 1.0841 and 1.0826 levels.Daily chart
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Hourly chart: The hourly chart reveals that the currency exchange rate is moving steadily lower. However, most recently the pair has reached the support provided by the lower Bollinger band at 1.0847. Below that line is the weekly R1 at 1.0841. Moreover, the 55-hour SMA is moving in from the downside near the 1.0840 level. These factors combined indicate that a rebound of the pair might soon occur.
Hourly chart
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Read More: Technical Analysis
Markets remain bearish
SWFX traders remain bearish, as 63% of open positions are short. Meanwhile, trader set up orders are neutral.
OANDA sentiment remains bearish, as 62.44% of trader open positions are short on Tuesday, compared to 62.07% positions previously. In addition, SAXO bank clients are also bearish, as 64.87% of open positions are short, compared to 64.49% on Monday.
Spreads (avg,pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.07 in June
Traders, who were questioned on their longer-term views on EUR/USD between February 28 and March 28 expect, on average, the currency pair to trade around 1.07 by the start of July. In general, 55% (+1%) of participants believe the exchange rate will be generally above 1.06 in ninety days, and 19% (+1%) see it above 1.12. In the meantime, 15% of those surveyed reckon the pair will be at parity or below. © Dukascopy Bank SA