- SWFX market sentiment is 62% bearish (+2%)
- 53% of pending orders in 100-pip range are to SELL the Euro
- Pending orders are at equilibrium
- No fundamentals in this session
The EUR/USD currency pair was not exposed strongly to the influence of fundamentals on Monday. The Greenback weakened against the European single currency 7 base points to near the 1.2400 level.
Economic activity in the US services sector was the strongest in more than 12 years, supported by rising new orders, suggesting that the economy sustained the strong momentum in the beginning of the year. The ISM survey showed that its non-manufacturing PMI jumped to 59.9 in January, from 55.9 in the prior month. The US economy kept expanding even before the stimulus from a $1.5T tax cut program has begun to filter through. However, that is likely to cause some concerns that the country's economy could overheat.
No fundamentals
No significant fundamentals are scheduled for today. The only data release – the Italian Industrial Production published at 0900GMT – is unlikely to affect the market in any way.
EUR/USD reaches senior channel
EUR/USD introduced no changes to its overall price level on Thursday, as it remained fluctuating between the 38.20% Fibo retracement and the monthly PP in the 1.2225/89 area.Meanwhile, the Euro has reached the bottom boundary of both the junior and senior channels. The latter was formed late in October. According to technical indicators, some upside potential still exists. Also, the rate should accelerate northwards in line with the prevailing channels. However, the combined resistance of the monthly PP and the 55-hour SMA circa 1.23 is likely to hinder the Euro for some time or even halt its movement up.
In case this area is breached, the ultimate high for the given session should be the 100-hour SMA and the 23.60% Fibo near 1.2350. Bottom limit for today— the weekly S3 at 1.2170.
Hourly Chart
Following a week of decline, the Euro demonstrated some signs of recovery on Friday morning. The pair, however, maintained its trading range between the monthly PP and the weekly S2.
In terms of longer-term outlook, the Euro has been confined in a three-month ascending channel against the US Dollar. The pair's current position within this pattern suggests that it might either consolidate or edge slightly lower during the following sessions until the bottom boundary of this medium-term pattern is reached circa 1.22.
Daily Chart
Bears become stronger
The bearish market sentiment has increased by two percentage points to 62% short positions in this session.
In the meantime, the outlook for the two currencies against the rest of the traded financial instruments is as follows: the Euro is 66% bearish and the US Dollar is 60% bullish.
OANDA traders have decreased their bearish sentiment in this session, as 56% of open positions are short (-1%). On the other hand, the bearish sentiment of Saxo Bank clients has increased to 59%, compared to 57% on the previous day.
Spreads (avg, pip) / Trading volume / Volatility