- SWFX market sentiment is 51% bullish
- Trader pending orders are 54% bearish
- Pair opened Wednesday's session at 1.0605
- Upcoming Events: President Trump's Speech
The mood among German investors improved markedly in April amid strong economic growth in the Q1 and easing concerns over the US President Donald Trump's protectionist policies. The Mannheim-based ZEW Institute reported on Tuesday that its Economic Sentiment Index jumped to 19.5, the highest level since August 2015, from 12.8 points seen in March, while analysts anticipated a slight increase to 13.2. Despite Trump's latest border tax threats, the German car industry reported that it started the year with solid growth. Moreover, figures released last week showed that both German industrial production and trade surplus soared in February.
The assessment of the current economic situation in Germany climbed to 80.1 points in April, compared to the previous month's 77.3, whereas markets expected a modest increase to 77.7 during the reported period. Many analysts revised up its growth projections for the German economy. Thus, the Euro zone's largest economy is set to expand 1.5% in 2017 and 1.8% in 2018. Tuesday's strong figures provided support to the current German Chancellor Angela Merkel's government ahead of the September parliamentary elections. After the release, the EUR/USD pair rose above 1.0600.
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Upcoming events: Donald Trump speaks
The most notable event, which has been scheduled to occur during Wednesday's trading session, will offset everything else. The US President Donald Trump is set to give a speech at 10:00 GMT. He is most likely to address the latest global events, which have caused a run to safety in finance.
Read More: Fundamental Analysis
EUR/USD trades near 1.06 mark
Daily Chart: Due to US Dollar weakness caused by fundamental political events, the EUR/USD currency exchange rate has returned to fluctuate near the 1.06 mark on Wednesday morning. Previously, as the pair was set to decline to the support cluster near the 1.0550 mark, the rate suddenly regained ground and tested the resistance put up by the weekly PP and the 100-day SMA near the 1.0620 level. The pair remained between the mentioned levels of resistance on Wednesday morning, as markets continued to watch fundamental events occurring in the world. Meanwhile, from a technical perspective the decline to the 1.0550 level is still to be expected.Daily chart
© Dukascopy Bank SA
Hourly chart: The hourly chart reveals additional information. The previously active medium term descending channel has been broken, as the currency exchange rate has formed a new short term ascending channel. However, the channel up pattern faces strong levels of resistance as not only the weekly PP at 1.0621 and the 23.60% Fibonacci retracement level at 1.0639, but also various SMAs are above the currency pair.
Hourly chart
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Read More: Technical Analysis
SWFX traders remain undecided
SWFX market sentiment remains almost neutral, as 51% of open positions are long. Meanwhile, 54% of set up orders are to sell.
OANDA traders remain in the bullish territory, as 60.70% of trader open positions are long on Wednesday, compared to 60.36% previously. Meanwhile, SAXO bank clients remain almost neutral, as 51.98% of open positions are long now, compared to the 51.99% short positions on Tuesday.
Spreads (avg,pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.08 in July
Traders, who were questioned on their longer-term views on EUR/USD between March 12 and April 12 expect, on average, the currency pair to trade around 1.08 at the start of July. In general, 43% of participants believe the exchange rate will be generally above 1.08 in ninety days, and 24% (-1%) see it above 1.12. In the meantime, 9% (+1%) of those surveyed reckon the pair will be at parity or below. © Dukascopy Bank SA