- SWFX market sentiment is 52% bullish
- Trader pending orders are 59% to sell
- Pair opened Thursday's session at the 1.1096 level
- Aggregate daily technical indicators bet EUR/USD will remain unchanged
- Economic events to watch over the next 24 hours: US Unemployment Claims; US ISM Non-Manufacturing PMI
As data released yesterday, US crude oil stockpiles advanced more than 14 million barrels during the previous week, showing the largest weekly build since the US Energy Department started keeping records back to 1982. As data suggests, West Texas Intermediate crude prices drop 1.13% with the report's release, stabilizing at $46.33. Brent prices, in turn, went down 1.42% at $47.92. Nevertheless, oil had rallied earlier on Wednesday on a sliding dollar, and after Colonial Pipeline had to shut down its main pipeline for a second time in as many months following an explosion. Overall, oil prices tumbled around 3% yesterday after a record weekly build in US crude stocks added to worries of all-time highs in OPEC production. In the meantime, the deal in Doha fell apart as OPEC's biggest producer Saudi Arabia would not accept Iran's position that it is their sovereign right to increase output. The general purpose of the most recent meeting was to finalize details of supply cuts and how cartel members and non-members led by the Russia will share the cuts. Although, the non-OPEC members including Azerbaijan, Brazil, Kazakhstan, Mexico, Oman and Russia together produce 21% of global supply or around 19.6 million barrels each day.
US manufacturing activity grew for the second consecutive month in October, official data showed on Tuesday. The Institute for Supply Management said its Manufacturing Purchasing Managers' Index jumped to 51.9 points in October, following the preceding month's reading of 51.5 and surpassing the 51.8 market forecast. The October growth was mainly driven by a rise in production and hiring. Any reading above the 50 point level 50 indicates an expansion in the manufacturing sector, which accounts for about 12% of the US economy. Meanwhile, the Production Index rose 1.8% to 54.6 points, while the New Orders Index dropped to 52.1 from the previous month's 55.1 and the Employment Index increased 3.2% to 52.9 during the reported period. The Export Orders Index rose slightly to 52.5 from the prior month's figure of 52. Analysts widely expect manufacturing activity to pick up in the Q4. The US manufacturing sector was hit by the strong US Dollar between June 2014 and December 2015, as the appreciation of the Greenback hampered US exports. The Federal Reserve began a two-day policy meeting on Tuesday and it is unlikely to raise interest rates at this meeting ahead of the presidential election on November 8. However, analysts widely anticipate a December rate hike.
Upcoming fundamentals: US unemployment and ISM Non-Manufacturing PMI
During Thursday's trading session there will be a lot of data releases coming in from the EU and the US, which theoretically could affect the interest rate. However, as experience shows, most of them are just white nose, and their fluctuations from the aggregate analyst forecasts have a false correlation with the volatility of the currency exchange rate at the moment of the data release. Although, there are two data releases, which actually will affect the strength of the Greenback, as at 12:30 GMT US Unemployment Claims and at 14:00 GMT US ISM Non-Manufacturing PMI will be released.
EUR/USD already above 1.11
Daily chart: The Euro continued to surge against the US Dollar on Thursday morning, as the currency exchange rate was in its third consecutive session of gains. However, as noted before, the surge is caused by political uncertainty coming out of the events surrounding the US Dollar. Due to the narrowing election investors are shifting from the Greenback to the Swiss Franc and Gold. In addition, Euro is being bought also. However, an ascending channel can be seen to have formed in the past five trading sessions.Daily chart
Hourly chart: The hourly chart reveals, that it is the upper Bollinger band, which keeps the EUR/USD currency exchange rate down. However, the general trend is still a strong surge, as the rate approaches new heights. Moreover, by looking back into previous sessions one more particularity can be noticed, as the weekly resistance levels manage to hold off the rate from climbing every time only two hours.
Hourly chart
Traders move to bearish side
Traders have become slightly bearish, as 52% of open positions are short. In addition, 59% of trader set up orders are short.
OANDA traders have become bearish, as 55.00% of open EUR/USD positions are short on Thursday. Meanwhile, SAXO Bank clients increased their bearishness, as open short positions now add up to 68.02%, compared to 66.70% short positions during the previous trading session.