- SWFX market sentiment is 60% bearish
- Trader pending orders are 57% bearish
- Pair opened Thursday's session at 1.0868
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Upcoming Events: EU Economic Forecast; FOMC Member Dudley's Speech; US PPI; US Unemployment Claims; German Preliminary GDP
On Thursday morning the EUR/USD currency exchange rate remained below the 1.09 level. However, a fall of the Euro is still expected by the markets. The reason for the recent surge is the political turmoil occurring in the US, which has caused a fundamental correction in the strength of the US Dollar and given strength to the now politically calm Europe.
The US Import Price Index managed to post a larger-thanexpected gain over the course of April, official data revealed on Wednesday. The US Bureau of Labour Statistics reported that the price index for US imports tacked on 0.5% in April, following the upwardly revised 0.1% uptick registered in the preceding month and beating analysts' expectations for a 0.2% increase. April's surge was mainly driven by higher fuel prices, which rose 1.6% over the month of April, following a 0.9% drop observed in March.
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Upcoming events: US PPI in focus
There are various events about to occur in the aftermath of a rather silent first half of the week. The day starts with the EU Economic Forecasts at 09:00 GMT. At 10:25 GMT FOMC member Dudley is set to give a speech. Later on, at 12:30 GMT, will be the most important time to watch the fundamentals, as at that time the US PPI and Unemployment Claims will be published. That data release will be covered by the Dukascopy research team online on the Dukascopy webinar platform. Moreover, traders have to remember that at 06:00 GMT on Friday the German GDP data will be published.
Read More: Fundamental Analysis
EUR/USD stalls below 1.09
On Thursday morning the common European currency traded between the 1.0860 and 1.0880 levels against the US Dollar. From a technical perspective the currency exchange rate was still set to decline down to the support cluster, which surrounds the 1.0830 mark. However, due to recent US Dollar weakness caused by political events in the country the currency pair has remained just below the 1.09 level. Markets are still expecting the Euro to resume its decline, as the European Central bank is set to continue its stimulating monetary policy.
Daily chart
On the hourly chart it can be observed that the currency exchange rate remains in the descending channel pattern. The recent movements of the currency pair were the representation of the pair's rebound against the lower trend line of the channel. Due to that reason it can be expected that the weekly S2 at 1.0833 will be reached soon.Hourly chart
Read More: Technical Analysis
Market sentiment strongly bearish
SWFX traders remain bearish, as 60% of open positions are short. In addition, 57% of trader set up orders are set to sell the Euro.
OANDA traders remain bearish, as 59.42% of trader open positions are short on Thursday, compared to 60.93% previously. In addition, SAXO bank clients are also bearish, as 54.98% of open positions are short, compared to the 54.39% positions on Wednesday.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.10 in August
© Dukascopy Bank SATraders, who were questioned on their longer-term views on EUR/USD between April 11 and today expect, on average, the currency pair to trade around 1.10 in August. In general, 50% of participants believe the exchange rate will be above 1.10 in ninety days, and 35% see it above 1.12. In the meantime, 2% (-1%) of those surveyed reckon the pair will be at parity or below.