- SWFX market sentiment is 62% bullish
- 55% of pending orders in 100-pip range are to SELL the Euro
- Upcoming fundamental events: US PPI and Core PPI m/m; FOMC Economic Projections, Statement and the Federal Funds Rate, FOMC Press Conference
The strong plunge mid-Tuesday was stopped by the 200-hour SMA.
The Markit released Manufacturing Purchasing Managers Index data that came out better-than-expected of 54.4, compared to the 53.9 in the previous period.
"At first glance, the mild acceleration in the rate of output growth and rise in the headline PMI would appear positive," Rob Dobson, a Markit director, said. "However, scratch beneath the surface and the rebound in the PMI from April's 17-month low is far from convincing."
Main attention to Fed
All the attention is this session is put towards the Federal Reserve which is set to publish its monetary policy statement at 1800GMT. The market expects the Federal Funds Rate to be increased to 2.00%, compared to 1.75% at the moment. The FOMC Press Conference is scheduled 30 minutes after the official release at 1830GMT.
Prior to this event, the US Bureau of Labour Statistics will release the monthly Producer Price Index and its core reading at 1230GMT.
EUR/USD halted by moving averages
EUR/USD showed high volatility on Tuesday. It was dominated by bulls during the first part of the day, but nevertheless failed to overcome the psychological 1.18 mark. As a result, it retraced from the breached two-week channel up and allowed bears to dominate the remainder of the session until the 200-hour SMA was reached at 1.1740.Technical indicators are tended south today; however, given that this 1.1740 area is likewise restricted by the 55-period (4H) SMA, the Euro might lack the necessary bearish momentum to dash through this support during the first part of the day. This could send the pair higher within the following hours.
By and large, the Fed policy statement at 1800GMT is likely to introduce volatility; thus, today's trading range should be wide, possibly 1.1700/1.1820.
Hourly Chart
The common European currency has fallen considerably against the US Dollar since mid-April which marks a 5.95% plunge within a couple of weeks. The pair started to recover on May 30 after hitting a six-month low of 1.1550. It is expected that this up-move continues in the medium term.
The Euro breached the monthly PP and the 23.60% Fibonacci retracement near 1.1765. The 1.18 mark should eventually surrender, thus allowing the pair to appreciate until the 55- and 200-day SMAs and the monthly R1 near 1.20.
Daily Chart
Bulls remain in charge
EUR/USD remains strongly bullish with 62% of open positions being long.
The outlook for the two currencies against the rest of the traded financial instruments is as follows: the Euro is 56% bullish and the US Dollar is 60% bearish.
OANDA traders are bullish on the pair with 53% of open positions being long today (+1%). Meanwhile, the market sentiment of Saxo bank is 53% bearish (+2%).
Spreads (avg, pip) / Trading volume / Volatility