- SWFX market sentiment is 58% bearish
- Trader pending orders 55% bullish
- Pair opened Friday's session at 1.1399
- Upcoming Events: US CPI; US Retail Sales
The common European currency on Friday traded near the previous session levels against the US Dollar. Nothing much had changed on larger timeframes. However, it was possible to forecast the future direction of the currency pair by examining the smaller timeframe charts.
The US Producer Price Index for final demand nudged up 0.1% in June on the back of sustained increases in services cost that managed to offset plunging energy prices, data released by the Labour Department revealed on Thursday. The gain came in as a surprise, as the vast majority of analysts had predicted the index to stay unchanged, and suggested that a recent moderation in inflation was likely temporary.
US consumerism in focus
The week ends with an important data release occurring in the US. At 12:30 GMT the Dukascopy research team will cover the publication of the US CPI and Retail Sales data sets. The data will be shown in various timeframes and ways. However, in general the CPI and Retail Sales will show the situation in the US consumption markets, which show the demand for growth in the country. Meanwhile, one might watch also out for the data coming in at 13:15 GMT, as it has been seen historically that the capacity utilization rate and the industrial production data can suddenly cause major shifts in the US Dollar strength.
EUR/USD finds support
After the fall of the common European currency against the US Dollar on Thursday morning the pair had recovered some of the suffered losses on Friday morning. The currency pair found support in the described cluster below it. However, it did reach down below the 1.1380 level at one moment, which might have triggered placed orders. Meanwhile, on Friday morning it was expected that the surge will continue, as the EUR/USD pair faced only the minor resistance of the 55-hour SMA at the 1.1425 mark. Although, there is a previously broken trend line located just below the 1.1440 mark. The trend line might show some minor resistance, as it did during the early hours of Thursday's trading.
Hourly Chart
The daily chart reveals that the uptrend still remains in force. The currency exchange rate has simply encountered the resistance of the upper trend line of a long term ascending channel. Most likely a decline is set to occur in the next few trading sessions, instead of the expected jump directly to the 1.15 mark. However, the fundamental events scheduled could still make any of the patterns obsolete.
Daily Chart
Bearish sentiment persists
The situation in the SWFX markets remains unchanged, as traders remain bearish with 58% of open positions being short, and 55% of trader set up orders are to buy the Euro.
Traders of OANDA are bearish, as 65.47% of open positions are short. Meanwhile, SAXO bank clients also remain at the bearish front, as 61.72% of their trader open EUR/USD positions are short.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast shows EUR/USD will trade below 1.13 in October
Traders, who were questioned on their longer-term views on EUR/USD between June 14 and July 14, expect, on average, that the currency exchange rate may trade near 1.13 during the second week of October. In general, 64% (-3%) of participants believe the exchange rate will be above 1.12 in the following ninety days. Meanwhile, 32% (+2%) of respondents expect to see the rate below 1.10.