- SWFX market sentiment is 57% bearish
- 51% of pending orders in 100-pip range are set to SELL
- 52% of traders are bullish on the Dollar
- Upcoming Events: Euro Zone Final CPI, US Unemployment Claims, Import Prices, Capacity Utilization Rate, Industrial Production, Philly Fed Manufacturing Index
In result of a breakout from previously dominant large descending channel the exchange rate managed to climb to the 1.1850 level. However, a release of the American inflation data pushed it back the support area formed by the 55-hour SMA, which presupposes another redound.
The Greenback fell against the European single currency on encouraging US inflation and retail sales reports. The EUR/USD currency pair rose 20 base points or 0.17% to the 1.1858 mark, but lost the gains initially to return in the area below the 1.1800 level.
The Labour Department revealed that the US consumer inflation eased to 0.1% from 0.5% in October, while its core figure appreciated to 0.2% in the same period. Relatively strong readings pointed to the end of disinflationary trend, which worried the Fed the most. The report also showed a little slowdown in retail sales growth pace, though stronger consumers spending, including higher real wages and job gains are expected to encourage retailing in the next months.
US manufacturing data
Starting from 13:30 GMT a number of American institutions will publish updates on manufacturing data. Taken separately they usually do not cause any notable price movements. However, once they are released together there might appear volatility in the markets.
EUR/USD halts surge amid US inflation data
In first half of the previous trading session the Euro continued to rapidly advance against the Dollar and practically reached the 1.1850 mark. However, the subsequent release of the American inflation and retail sales data that matched with analysts' expectations returned the pair back to the 55-hour SMA near the 1.1780 level. As this moving average is additionally backed up by a combination of the 38.2% Fibonacci retracement level and the weekly R2, there is a little chance that the pair will manage to break to the bottom without proper impulse. The same applies for opposite direction, which is secured by the 50% retracement level and the monthly R1. So, this trading session the pair is likely to spend moving horizontally between these barriers unless the US manufacturing and jobs data will cause some notable price movements.
Hourly Chart
In line with expectations, the 55-day SMA managed to constrain the pair from further surge towards the monthly R1 and the 50% Fibonacci retracement level. Nevertheless, there is a need to notice that a great role in this turnaround played positive American data. In the upcoming two days the pair might resume the surge, but there is little chance that it will manage to bypass the above resistance without receiving a proper impulse from some fundamental event.
Daily Chart
Traders stay bearish
In result of the previous trading session the bearish market sentiment slightly increased, as 57% 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 63% bearish and the Dollar is 52% bullish.
Traders of OANDA remain bearish, as 65% (+1%) of open positions are short. Meanwhile, SAXO are neutrally bearish on this currency pair with 61% (+1%) of open short positions.
Spreads (avg, pip) / Trading volume / Volatility