- SWFX market sentiment is 59% bearish
- 54% of pending orders in 100-pip range are set to BUY
- 55% of traders are bullish on the Dollar
- Upcoming Events: EU Minimum Bid Rate and ECB Press Conference
Despite a release of positive data on the US Durable Goods Orders, the Euro continued to rally against the Dollar yesterday. The surged was related to markets anticipation of the upcoming ECB meeting that might make an important decision regarding lessening of the QE program.
The US Durable Goods Orders report was one of the weakest currency trigger on Wednesday, causing a modest decrease in the EUR/USD exchange rate. The Euro fell against the Greenback 7 base point, but recovered initially to move closer to the weekly high above 1.820.
The Commerce Department showed that the US durable goods rose 2.2% for the month of September, owing to higher demand for transportation equipment. The report supported an upbeat sentiment in the manufacturing industry, as it managed to start recovering after being hit by hurricanes. In addition, the proposed corporate tax cut is likely be one more catalyst providing a stronger footing for growth in the fourth quarter, as well as in the beginning of 2018.
ECB meeting
At 11:45 GMT the European Central Bank regarding the Euro Zone's Minimum Bid Rate. However, the main event that might cause event higher volatility in the markets will happen 12:30 GMT the central bank governors will start a press conference, where they are expected to clarify their position regarding the future of the QE program.
EUR/USD anticipates ECB meeting
Despite a release of better than expected US purchase orders data the currency rate did not manage to bypass the 55-hour SMA and soared in the opposite direction. The main drivers that pushed and are continuing to push the pair to the top are expectations on the upcoming ECB meeting. On the one hand, the currency rate faces two notable resistance levels near 1.1835 and 1.1850. The first one represents an upper trend-line of an alleged descending triangle, while the second one represents an upper boundary of a large descending channel. However, if the central bankers' meeting produces a decision about cutback of the quantitative easing program the Euro might easily break through these barriers and reach the 1.1900 mark.
Hourly Chart
On daily chart the currency pair is rapidly approaching to a combined resistance set up by the 55-day SMA and the upper trend-line of a dominant descending channel. On the one hand, such strong barriers indicate on an upcoming rebound. On the other hand, the ECB press conference has a chance to give the Euro an impulse strong enough to break to the top.
Daily Chart
Traders remain bearish
In result of the previous trading session the bearish market sentiment still slightly increased, as 59% of open positions are short now.
In the meantime, the outlook for the two currencies against the rest of the traded financial instruments is the following: the Euro is 64% bearish and the Dollar is 55% bullish.
Traders of OANDA remain bearish, as 63% (+2%) of open positions are short. Meanwhile, SAXO are also bearish on this currency pair with 62% (+2%) of open short positions.
Spreads (avg, pip) / Trading volume / Volatility