- SWFX market sentiment is 54% bullish
- Trader pending orders are 57% to sell
- Pair opened Wednesday's session at the 1.0981 level
- Aggregate daily technical indicators bet EUR/USD will fall
- Economic events to watch over the next 24 hours: US Building Permits; US Housing Starts; FOMC Member Dudley Speaks
US consumer prices rose most since April last month, driven by a surge in gasoline and rental prices. On Tuesday, the US Department of Labor said its Consumer Price Index advanced 0.3% in September, following the preceding month's gain of 0.2% and meeting analysts' expectations. On an annual basis, the CPI climbed 1.5%, posting the biggest year-over-year rise since October 2014 and surpassing August's 1.1% increase. Meanwhile, the so-called core CPI, which excludes food and energy prices, rose 0.1% month-over-month and 2.2% year-over-year in the same month after climbing 0.3% on a monthly basis and 2.3% on a yearly basis in August. Notwithstanding, today's disappointing core CPI data is unlikely to change the prospect of a Fed rate hike in December. The September increase was mainly driven by higher gasoline prices that surged 5.8% after falling 0.9% in August. The price of food remained unchanged for the fifth consecutive month in September. As to the core CPI, owners' equivalent rent of primary residence advanced 0.4%, following the 0.3% rise in August, while medical care costs grew 0.2%, compared to the preceding month's 1.0% hike. Hospital services prices held steady in September, whereas prescription drug costs climbed 0.8%.
Consumer prices held steady in the Euro zone last month, official figures revealed on Monday. According to Eurostat, the Consumer Price Index came in at 0.4% month-over-month in September, up from the 0.2% rise seen in August. On a yearly basis, the headline CPI came in at 0.4%, unchanged from the prior month and in line with analysts' expectations. The highest inflation annual rate of 1.8% was recorded in Belgium. Meanwhile, the greatest deflation was registered in Bulgaria, where consumer prices dropped 1.1% yearover-year in September. The so-called core CPI, which excludes food, energy, alcohol and tobacco, rose 0.5% month-over-month in September, following the preceding month's 0.3% increase. On an annual basis, core consumer prices advanced 0.8% in the reported month, meeting projections and the prior month's reading. The September growth in consumer prices was mainly supported by restaurants and cafes, rents and tobacco. Since 2013, the European Central Bank aims at inflation rates of below, but close to, 2% over the medium term. After the release, the Euro rose 0.27% against the US Dollar to trade at $1.0998, while Germany's DAX fell 0.44% to 10,533.44 and France's CAC 40 declined 0.34% to 4,456.52.
Upcoming fundamentals: US Building Permits and Dudley's speech
US construction data will affect the EUR/USD pairs movements during today's trading session, as there are no data releases set to occur from the side of the EU. US Building Permits and Housing Starts are set to be published at 12:30 GMT. One more notable event is the speech set to occur at 23:45 GMT, as FOMC Member Dudley is set to speak, and he might give insight into the policy of the Fed.
EUR/USD once more below 1.10 on Wednesday morning
Daily chart: The common European currency had remained rather unchanged against the US Dollar on Wednesday morning. However, after previously falling during Tuesday's trading session the currency exchange rate was below the significant 1.10 mark, as the rate failed to break through the resistance put up by the second monthly support level at 1.1026 during Tuesday's trading. At the moment, the outlook seems like the rate is set to fall to at least the 1.0929 level, where the closes support is located at.Daily chart
Hourly chart: The hourly chart for the EUR/USD pair reveals that the rate attempted to break through the resistance put up by the second monthly support level at 1.1026 for 10 hours straight. It occurred due to the 20 and 100-hour SMAs providing support to the rate each time it bounced off the resistance. However, by 10:00 GMT the SMAs moved lower, and with it the rate gave up on the attempts and fell below the 1.10 level by 12:00 GMT. Since the rate has attempted to regain some of the losses, but it is held back by various SMAs, including the previously mentioned.
Hourly chart
Traders remain slightly bullish
SWFX traders remain slightly bullish on the pair, as 54% of open positions are long. In the meantime, pending commands remain bearish, as 57% of set up orders are to sell.
OANDA traders have increased their bullishness on Wednesday, as 62.14% of open EUR/USD positions are long. In addition, SAXO Bank clients have become also bullish, as open long positions now add up to 51.19%, compared to 48.93% during the previous trading session.