- SWFX market sentiment is 55% bullish
- Trader pending orders are 58% to sell
- Pair opened Tuesday'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 ISM Manufacturing PMI
Consumer spending in the United States increased more than expected last month amid higher purchases of motor vehicles and higher inflation, official data revealed on Monday. According to the US Department of Commerce, consumer spending jumped 0.5% in September, following the preceding month's downwardly revised fall of 0.1% and meeting analysts' expectations. When adjusting for inflation, Monday's report showed consumer spending advanced 0.3% in the reported month after dropping 0.2% in August. In the meantime, the PCE Price Index grew 0.2% in September, the same pace as in the previous month. Year-over-year, the Index climbed 1.2%, the largest annual gain since November 2014, up from August's gain of 1.0%. Furthermore, the so-called core PCE Index increased 0.1% in the same month, compared to the 0.2% rise registered in August. On an annual basis, the core PCE Index advanced 1.7%, the similar increase in the preceding month. Officials from the US Federal Reserve meet for two days this week, starting Tuesday, to discuss . The Fed is not expected to raise interest rates at that meeting ahead of the presidential election; however, analysts widely anticipate a rate hike in December. Back in September, the Fed held rates steady for the sixth straight meeting
The single European area economy grew at the same slow pace in the third quarter as the second while core inflation, in turn, dipped in October, reinforcing expectations that the European Central Bank will negotiate to extend its asset-buying program in December. Meanwhile, Euro-zone's preliminary gross domestic product growth increased a seasonally adjusted 0.3% in the third quarter. The following data was in line with forecasts and unchanged from Q2. Consumer prices, in turn, advanced 0.5% year-on-year in October, picking up from 0.4% in September and 0.2% in August as the drag on the index from energy diminished. In the meantime, energy prices were only 0.9% lower in October than 12 months earlier, compared to 3.0% down in September. However, excluding the most volatile prices for unprocessed food and energy, inflation was just 0.7% on a yearly basis, down from 0.8% in the previous five months. The figure is the one the ECB uses as core inflation. Eventually, the ECB is going to meet in December and will have to decide whether it extends its bond-buying beyond an initial target date in March.
Upcoming fundamentals: US ISM Manufacturing PMI
There are a lot of data releases set to affect the markets during Tuesday's trading session. However, there is almost nothing that could increase the volatility of the EUR/USD, as only the US ISM Manufacturing PMI is worth mentioning. The index is set to be released at 14:00 GMT.
EUR/USD approaches weekly PP on Tuesday
Daily chart: The Euro slightly depreciated against the US Dollar on Tuesday morning, as the currency exchange rate was slowly heading for the weekly PP, which is located at 1.0942. Previously, on Monday the currency pair did not fluctuate much during the session, as it only slightly moved southwards by almost 12 pips, which could be called as a no move at all. It is most likely that the pair will continue to fall until it reaches the weekly PP at 1.0942, where it is likely to find some support.Daily chart
Hourly chart: The hourly chart for the EUR/USD reveals important, additional information. The pair did not move only slightly during Monday's trading session. It actually fluctuated a lot more, as the rate began the day by falling. As it fell, it reached the weekly PP at 1.0942 by 14:00 GMT. Afterwards, the currency exchange rate rebounded and began a surge, which was stopped at 21:00 GMT by the upper Bollinger band. Most recently, the rate found support in the 20-hour SMA, and it has stopped the fall.
Hourly chart
Traders decrease bullishness
Traders once more have decreased their bullishness, as 55% of open position are long on Tuesday, compared to 57% on Monday. Meanwhile, trader set up orders are bearish, as 58% of set up orders are to sell.
OANDA traders remain bullish on Tuesday, as 57.01% of open EUR/USD positions are long. Meanwhile, SAXO Bank clients remain bearish, as open short positions now add up to 57.89%, compared to 57.60% short positions during the previous trading session.