- SWFX market sentiment is 51% bullish
- Trader pending orders are 62% to sell
- Pair opened Thursday's session at 1.0548
- Upcoming Events: EU CPI Flash Estimate; US Unemployment Claims; German Retail Sales
US manufacturing activity rose at a stronger-than-expected pace in February, official figures showed on Wednesday. The Institute for Supply Management reported its Purchasing Managers' Index for the manufacturing sector advanced to 57.7 points last month, the highest level since December 2014, following the previous month's 56.0 points. Meanwhile, analysts anticipated a mild increase to 56.2. Wednesday's survey suggested that the US economy expanded for 93rd straight month. Data also showed the New Orders Index climbed to 65.1 last month from 60.4 in January. However, the Employment Index fell to 54.2 in February from the prior month's 56.1, surpassing analysts' expectations for a decline to 55.9.
Furthermore, the ISM survey showed the Prices Paid Index dropped to 68.0 points last month, meeting forecasts and following the preceding month's 69.0. Although the reading above 50 point level still indicated higher raw materials prices. The figures indicated strong growth of sales and demand, and painted a positive outlook for the manufacturing sector over the upcoming months. After the release, the EUR/USD pair rose from 1.0529 to 1.043. Nevertheless, the Greenback's gains on Wednesday were actually driven mostly by Donald Trump's address to Congress, which boosted investor optimism.
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Upcoming events: EU CPI and US Unemployment Claims
During Thursday's trading session the EUR/USD currency exchange rate might be affected by two data releases on both sides of the Atlantic Ocean. First of all at 10:00 GMT the EU Flash CPI and Core CPI data will be released. It is possible that this data actually causes short term volatility in the Euro. In the meantime, as it is accustomed on a Thursday, US Unemployment Claims are set to be published at 13:30 GMT. This data release will be covered by the Dukascopy research team in combination with Canadian GDP data. In addition, traders might want to look out from possible surprises set up by the German Retails Sales, which are set to be published on early Friday morning, at 07:00 GMT.
Read More: Fundamental Analysis
EUR/USD continues lower on set course
Daily Chart: During the early hours of Thursday's trading session the common European currency continued its way lower against the Greenback in accordance with the previous forecast. Previously, during Wednesday's trading session it seemed that the rate will fall below the 1.05 mark. However, that did not occur due to various fundamental reasons. As a result the rate managed to slightly gain by the end of the day, and with it the fall to the weekly S1 at 1.0491 has been delayed. Although, it is still clear that the rate is set to fall to the before mentioned support level.Daily chart
© Dukascopy Bank SA
Hourly chart: The hourly chart reveals that there is a descending channel, which can be observed on the smaller timeframe chart. In accordance with the chart, the currency exchange rate is most likely going to reach the weekly S1 at the latest by the middle of Friday's trading session. However, the rate is fluctuating near the upper trend line of the pattern, which means that the drop of the rate might occur much sooner.
Hourly chart
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Read More: Technical Analysis
SWFX sentiment unchanged
SWFX traders are neutral bullish on the pair, as 51% of open positions are long on Thursday. Meanwhile, 62% of trader set up orders are set to sell the Euro.
OANDA traders have increased their bullish view on the pair, as only 56.63% of trader open positions are long at the marketplace, compared to 53.46% previously. Alternatively, SAXO bank clients remain almost neutral, as 50.83% of open positions are long on Thursday.
Spreads (avg,pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.06 in April
Traders, who were questioned on their longer-term views on EUR/USD between February 2 and March 2 expect, on average, the currency pair to trade around 1.06 by the start of April. In general, 51% (+1%) of participants believe the exchange rate will be generally below 1.06 in ninety days, and 25% (-1%) see it below 1.02. In the meantime, 10% (-1%) of those surveyed reckon the pair will trade above 1.12 in three months. © Dukascopy Bank SA