- SWFX market sentiment is 60% bearish
- Trader pending orders 56% bullish
- Pair opened Friday's session at 1.1422
- Upcoming Events: US Average Hourly Earnings; US Non-Farm Employment Change; US Unemployment Rate; US Fed Monetary Policy Report
The common European currency has fulfilled the previous forecast against the US Dollar, as the rate has jumped. The currency exchange rate has broken the resistance levels, which were supposed to hold it down in the descending channel pattern. Afterwards it has used them to begin a surge, which is most likely going to continue on Friday.
New orders for US-made goods declined more than estimated for the second consecutive month in May, a worrisome sign for the manufacturing industry. The US Commerce Department reported on Wednesday that the country's factory orders dropped 0.8% month-over-month in May, following a downwardly revised 0.3% fall registered in April. Meanwhile, analysts anticipated new orders to show a smaller decline of 0.5%. On a yearly basis, factory orders were up 4.8%, suggesting that US manufacturing activity continued to expand at a moderate pace.
US Employment and Fed
On Friday market participants, which trade pairs that involve the US Dollar, have to be vigilant at two times. At 12:30 GMT a package of US employment data will be released. It will consist of the US Average Hourly Earnings, US Non-Farm Employment Change and US Unemployment Rate. The data release will be covered by the Dukascopy Research team on the live webinar platform. The data release usually affects the strength of the US Dollar by causing short term volatility. However, there is something larger set to occur during the day. At 15:00 GMT the Fed Monetary Policy Report will be released. It might change the fundamental perspective on the US Dollar.
EUR/USD pushed higher by fundamentals
On Friday morning the common European currency traded above the 1.14 mark against the US Dollar. The reason for that was the fact that instead of bouncing off the upper trend line of the short term pattern the currency exchange rate broke through the trend line. From a technical perspective it was done by the support of the 55 and 200-hour SMAs together with the weekly PP near the 1.1350 mark. However, the pair continued to surge until midnight. Due to that reason the fundamentals need to be examined. At 11:30 GMT on Thursday the ECB meeting accounts were published. It is most likely that in the minds of the market participants the rhetoric of the ECB officials has caused the strengthening of the Euro. Due to that reason once can expect the pair to reach for the 1.15 mark soon.
Hourly Chart
The daily timeframe chart shows that the currency exchange rate faces no resistance up to the 1.1490 mark, where the upper Bollinger band is located at. However, as the currency pair surges that resistance should move up. Due to that reason it can be assumed that the next notable resistance is located at the 1.1525 mark, where the weekly R1 is stationed. Although, starting next week this level of significance will also be gone. In the case that the newly calculated weekly pivot points don't stand in the way, the monthly R1 at 1.1542 would be the closest resistance to the EUR/USD pair.
Daily Chart
Bearish sentiment persists
The situation in the SWFX markets remains almost unchanged, as traders remain bearish with 60% of open positions being short. Meanwhile, 56% of trader set up orders are to buy the Euro.
Traders of OANDA are bearish, as 68.44% of open positions are short. Meanwhile, SAXO bank clients join the bearish front, as 67.34% of their trader open EUR/USD positions are short.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast shows EUR/USD will trade above 1.1250 in October
Traders, who were questioned on their longer-term views on EUR/USD between June 7 and July 7, expect, on average, that the currency exchange rate may trade above 1.12 during the first week of October. In general, 64% (-1%) of participants believe the exchange rate will be above 1.12 in the following ninety days. Meanwhile, 33% (+2%) of respondents expect to see the rate below 1.10.