- SWFX market sentiment is 56% bullish
- Trader pending orders are 58% to sell
- Pair opened Thursday's session at the 1.0974 level
- Aggregate daily technical indicators bet EUR/USD will fall
- Economic events to watch over the next 24 hours: EU Economic Summit; EU Minimum Bid Rate; ECB Press Conference; US Philly Fed Manufacturing Index; US Unemployment Claims
US housing starts dropped unexpectedly last month, whereas building permits rose more than expected, official figures revealed on Wednesday. According to the US Department of Commerce, the total number of housing starts issued fell 9.0% to a seasonally adjusted annual pace of 1.05 million in September, hitting the lowest level since March 2015, while market analysts anticipated a slight increase to 1.18 million units during the reported period. August's housing starts were revised up to a 1.15 million rate from the originally reported pace of 1.14 million starts. US single-family starts, which account for the largest segment of the market, climbed 8.1% to a 783,000 unit pace last month, the highest reading since February. The drop was mainly driven by the volatile multi-family segment, which posted a 38.0% decline to 264,000 unit pace in September. In the meantime, building permits advanced 6.3% to a seasonally adjusted annual pace of 1.23 million in the same month, following August's upwardly revised reading of 1.15 million permits and surpassing the 1.17 million unit pace market forecast. Building activity is set to rebound in the coming months as building permit values remained strong, with single-family and multi-family permits rising 0.4% and 16.8% in September.
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%.
Upcoming fundamentals: EU Central Banking and some US data
It is the first day of the EU Economic Summit, and information will be flowing out of it throughout the day. However, there are even more important events during the day. During the day the European Minimum Bid Rate will be announced at 11:45. Afterwards, at 12:30 GMT the ECB Press Conference will be held. As the ECB Press Conference affects the financial markets, in the US more data will be published, as the Philly Fed Manufacturing Index and US Unemployment Claims will be published at the same time.
EUR/USD slightly lower on Thursday
Daily chart: The common European currency traded slightly lower against the Greenback on Thursday morning. The move lower was just a continuation of an already three day old downward aimed trend, as the pair continued its move lower to the next support level at 1.0929. Moreover, from a fundamental perspective the noise regarding the Brexit negotiations has been messing up the air and mood in the markets, which causes the Euro to continue its decline. It is most likely that the rate is set to reach the before mentioned support level very soon.Daily chart
Hourly chart: The hourly chart reveals that the last time the pair attempted to break a resistance was round 8:00 GMT, when it failed to break through the 100-hour SMA. Since then the pair was falling slowly, as the Bollinger bands and the 20-day SMA kept the volatility low.
Hourly chart
Traders remain bullish
Traders remain bullish with 56% of total open positions as long. In the meantime, 58% of set up orders are to sell the Euro.
OANDA traders have increased their bullishness on Thursday, as 63.07% of open EUR/USD positions are long. In addition, SAXO Bank clients also remain slightly bullish, as open long positions now add up to 51.99%, compared to 51.19% during the previous trading session.