- SWFX market sentiment is 54% bullish
- Trader pending orders are 62% to sell
- Pair opened Thursday's session at the 1.0589 level
- Aggregate daily technical indicators bet EUR/USD will fall
- Economic events to watch over the next 24 hours: US Unemployment Claims; US ISM Manufacturing PMI
Consumer prices climbed in the Euro zone last month, official figures revealed on Wednesday. According to the Eurostat, the CPI came in at annualized 0.6% in November, up from 0.5% rise in October, the largest gain since May 2014. On a yearly basis, the core CPI came in at 0.8% unchanged from the prior month and matching analysts' expectations. The slump in energy prices was fractionally higher at annual 1.1% compared with 0.9% previously. In the meantime, oil prices felt from the highest level in October, though stayed greater than the 7.3% decrease in November 2015. The yearly growth in food and beverages prices advanced to 0.7% from 0.4% the previous month. The so-called core CPI, which excludes food, energy, alcohol and tobacco, held steady at 0.3% on an annual basis in the same month, meanwhile the service sector CPI was unchanged with a slight step lower from 1.2% in November 2015. Although core inflation holds at 0.8%, price increases stays below the European Central Bank aim of 2% despite sustaining an accommodative monetary stimulus. After the release, the Euro rose 0.14% against the US Dollar to trade at 1.0640, while Germany's DAX traded up 0.13%, France's CAC 40 advanced 0.24% and London's FTSE 100 gained 0.16%.
Corporate lending in the Euro zone advanced at the fastest pace since June 2011 in October, while the total amount of currency in circulation fell, official figures showed on Monday. According to the European Central Bank, lending to firms rose 2.1% on a monthly basis in October, the fastest pace in more than five years, following the preceding month's gain of 2.0%. Lending to households climbed 1.8% on an annual basis in the same month, unchanged from the September reading, whereas market analysts anticipated a slight increase to 1.9%. A measure of the money supply in the region, known as M3, grew 4.4% year-over-year in October, down from the prior month's 5.1% and below the 5.0% increase market forecast. The Central bank's policymakers are widely expected to extend their quantitative easing program by six months at their next meeting on December 8. According to the OECD's latest forecasts published on Monday, the Euro zone is set to grow 1.7% in 2016 and 1.6% in 2016, both figures were revised up from the September estimates despite the post-Brexit uncertainties. Moreover, later on the same day, Mario Draghi said in his speech to the European Parliament that the economy managed to overcome major challenges caused by Britain's decision to leave the European Union.
Upcoming fundamentals: US employment and ISM Manufacturing PMI
As expected all of the data released on Wednesday was ignored. The OPEC meeting and the following agreement on oil production freeze outweighed all of the other events. However, there are two macroeconomic data releases set to occur on Thursday, which might affect the strength of the US Dollar, and subsequently all of the financial instruments, against which it is traded. The releases will be the US Unemployment Claims at 13:30 GMT and the ISM Manufacturing PMI at 15:00 GMT.
EUR/USD finds support on Thursday
Daily Chart: The common European currency surged on Thursday morning against the US Dollar, as the pair began the rate just at the weekly pivot point at 1.0589. The pivot point provided enough support to propel the rate higher. However, previously during Wednesday's trading the currency exchange rate dropped to the 1.0552 mark, from where the initial rebound began. It is most likely that the rate will move upwards and bounce off resistance at 1.0650, where the medium scale pattern's upper trend line is located at. Afterwards the rate will continue its way down.Daily chart
Hourly chart: As a surprise, the hourly chart for EUR/USD does not reveal what exactly propelled the rate back upwards after reaching the 1.0552 mark. However, it can be clearly seen that afterwards the rate surged back above the weekly PP at 1.0589, which then provided support for twelve hours. It had to provide it, as all of the four simple moving averages used to analyze financial instruments by Dukascopy were and still are just above the weekly PP. However, the rate recently broke through them.
Hourly chart
Sentiment remains bullish
SWFX traders have not changed their opinion, as 54% of open positions remain long. Meanwhile, trader set up orders are bearish, as 62% of pending commands are to sell the Euro.
OANDA traders increased their bullish outlook, as 65.85% of open EUR/USD positions were long on Thursday morning, compared to 63.01% long positions on Wednesday. In addition, SAXO Bank clients have also increased their bullish outlook, as 54.08% open positions are long, compared to 50.41% during the previous trading session.