- SWFX market sentiment is 58% bearish
- Trader set up pending orders are 57% short
- Pair opened Monday's session at the 1.1167 level
- Aggregate daily technical indicators bet EUR/USD will surge
- Economic events to watch over the next 24 hours: US Empire State Manufacturing (August); NAHB Housing Market Index (August); Long-term TIC Net (June); Total TIC Net (June)
Sales at US retailers unexpectedly fell in July, official data revealed on Friday. According to the Department of Commerce, retail sales came at a seasonally adjusted 0.0% in the reported month, compared to the previous month's upwardly revised figure of 0.8%, while economic desks pencilled in a deceleration to 0.4%. Furthermore, core retail sales, excluding automobiles, dropped a seasonally adjusted 0.3% in the seventh month of the year, whereas the preceding month's gain was revised up to 0.9% from the originally reported increase of 0.7%, whereas analysts expected a decrease to 0.2%. Separate reported released by the Department of Labor on the same day showed that US producer prices returned to contraction in July after three months of consecutive growth, as the Producer Price Index dropped 0.2% on an annual basis in the reported month, following the 0.3% rise registered in July. Monthover-month, US factory gate inflation declined 0.4% in July, compared to the 0.5% gain seen in the preceding month, while market analysts anticipated a fall to 0.1% in the reported period. Meanwhile, the University of Michigan Consumer Sentiment survey released on Friday showed that mood among US shoppers improved in August, as it preliminary Consumer Confidence Index rose to 90.4, compared to July's final print of 90.0, while markets predicted the Index to come in at 91.5 in the reported period.
Economic growth in the Euro zone's largest economy, Germany, contracted in the Q2 2016, flash reading revealed on Friday. As reported by the Federal Statistical Office (Destatis), the economy expanded a seasonally adjusted 0.4% in the reported quarter, after rising 0.7% in the Q1 2016. Nevertheless, market analysts anticipated a deceleration to 0.3% in the Q2 2016. German GDP growth in the Q2 was mainly supported by rising exports, as well as private and government consumption, Destatis said. Furthermore, the annual gauge on a non-seasonally adjusted basis revealed a 3.1% expansion in the Euro zone's powerhouse in the same quarter, compared to the preceding quarter's upwardly revised reading of 1.5%. In the meantime, separate data from the Federal Statistics Office showed on Friday that consumer price inflation in the Euro zone's number one economy accelerated last month. Consumer prices in Germany rose 0.4% year-over-year on a non-seasonally adjusted basis in July, following the 0.3% increase seen in the previous month. On a monthly basis, the CPI grew 0.3%, up from June's 0.1%. Both readings came in line with the flash estimates and analysts' expectations. The primary objective of the current monetary policy run by the European Central Bank is to maintain annual inflation rates below, but close to, 2% over the medium term.
Upcoming fundamentals: Upcoming fundamentals: US economic indices and long term securities purchases
On August 15 the EUR/USD currency exchange rate will be affected by two indices and the net foreign purchases of long term US securities. First will come the US Empire State Manufacturing index for August at 12:30 GMT, and it is forecasted to be at 1.99, which would indicate at a manufacturing activity increase in the New York State. Afterwards, the NAHB Housing Market Index for August will be out at 14:00 GMT, and the index is forecasted to be at 59, which also indicates at expansion of activity. Last but not least, the Long-term TIC Net for June will be published at 20:00 GMT, which is a complicated term form long term net purchases of US securities by foreigners or money incoming into the US economy through securities markets.
EUR/USD near the weekly PP at 1.1151 on Monday
Daily chart: The common European currency traded just above the newly formed weekly PP at 1.1151 against the US Dollar on Monday morning. In addition, the pivot point is also supported by the 55-day SMA. The currency exchange rate already bounced off the support level once, and no matter if it tests the support once more, the pair is most likely to surge during today's trading session. A surge is also supported by the daily aggregate technical indicators and the fact that the currency pair is close to being oversold.Daily chart
Hourly chart: On the hourly chart the Euro appreciated slowly against the Greenback at the start of Friday's trading session, as the currency exchange rate was struggling with the resistance put up by the 55-hour SMA. However, that changed at 12:30 GMT, as the US Retail Sales data came in a lot lower than expected, which skyrocketed the EUR/USD pair, as it surged from 1.1150 to 1.1221 during the hour from 12:00 to 13:00 GMT. Afterwards, the currency rate gradually returned to almost the previous level, as it was at 1.1155 by 1:00 GMT on Monday.
Hourly chart
SWFX sentiment bearish on Monday
OANDA trader bearish sentiment has decreased compared to Friday's 57.54%, as, at the moment, 56.74% of OANDA open positions are short. In the meantime, SAXO Bank clients have increased their bearish stance, as their open short positions are now at 65.47% compared to 64.41% of last trading session.