- SWFX market sentiment is 54% bearish (-3%)
- 65% of pending orders in 100-pip range are to SELL the Euro
- Strong southern barrier circa 1.2220
- Upcoming events: US GDP
Durable goods orders report was one of the weakest currency triggers on Tuesday; in fact, it could not compete with the Fed Chair Powell testimony, making the overall sentiment hovering in limbo. The Euro fell against the Greenback by 12 base points, or 0.10%, however, bears stepped in half an hour earlier, pushing the price down to 1.2287 level.
The Commerce Department said that the US durable goods plummeted 3.7% for the month of January. The drop occurred because the demand for transportation equipment tumbled 10.0%, reaching a six-month low, following a 2.6% increase in the prior month. Technical analysts anticipated the EUR/USD pair to go up, however, the news from the Fed reversed the expectations.
US GDP to be analysed
It is most likely that there will be still action occurring in the aftermath of the Jerome Powell' speech. However, there is another data set about to be released on Wednesday, which can be swing traded.
Namely, the US Preliminary GDP is scheduled to be published at 13:30 GMT. In regards to macroeconomic data releases this is the mother of all of them. The US Preliminary GDP has proven itself through mathematical tests to be second only to a change in the Federal Funds Rate announcement.
The data release will be covered by the Dukascopy research team on the bank's live webinar platform. The coverage is set to start ten minutes before the release. To join the webinar one needs to click on the notification that should pop up a minute before the start on all of the bank's trading platforms. On the other hand joining is possible at any time by either googling Dukascopy webinars or finding them in the TV section.
EUR/USD breaks support levels
As Jerome Powell's testimony's text was released on Tuesday, the US Dollar began its march of strength against the rest of the financial markets.First target was reached upon the release of the testimony at 13:30 GMT, when the support line of the previously most dominant identified pattern on Dukascopy bank's hourly charts was touched.
However, the decline did not end there. As the head of the Fed spoke, the EUR/USD declined down to teh levels near the 1.2220 mark.
In regards to the future, from a technical perspective all previously notable supports are broken, and the 1.2150 mark might be reached next.
Hourly Chart
The daily chart at the moment is the one to focus at the most. The reason for that is the breaking of the previously active ascending channel's lower trend line.
Due to that reason, by looking at the recent high and low levels, the situation was reviewed. As a result of that review a new large scale channel has been noticed. The channel has a lower inclination, but it should still guide the Euro higher against the US Dollar in the upcoming months.
However, before that occurs the lower trend line of the channel needs to be reconfirmed. Most likely that will occur, when the 55-day SMA reaches the support line of the pattern and provides additional strength to the Euro against the Buck.
Daily Chart
Traders are bearish
The number of short positions of the EUR/USD exchange rate is 55% in this session (-2%).
The outlook for the two currencies against the rest of the traded financial instruments is as follows: the Euro is 61% bearish and the US Dollar is 58% bullish.
OANDA traders remain bearish in this session, as 55% of open positions, compared to 54% on the previous session. The bearish sentiment of Saxo Bank clients stands at 58% short positions (-1%).
Spreads (avg, pip) / Trading volume / Volatility