- SWFX market sentiment is 56% bearish
- Pending commands in the 100-pip range 53% short
- Pair opened Friday's session at the 1.1075 level
- Aggregate daily technical indicators bet EUR/USD will depreciate
- Economic events to watch over the next 24 hours: French CPI (July); French GDP (Q2); Spanish GDP (Q2); EU CPI Estimate (July); EU Unemployment Rate; US GDP Annualized (Q2); US PCE Annualized (Q2); US Employment Cost Index (Q2); US GDP Price Index Annualized (Q2); US Fed's Williams Speech; Chicago PMI (July); UoM Confidence Final (July)
The Consumer Price Index in the Euro zone's largest economy, Germany, continued to rise in July, the third consecutive month of growth, the Federal Statistics Office revealed on Thursday, but remained comfortably below the target level. The flash estimate from Destatis showed that consumer prices in Europe's economic powerhouse increased 0.3% month-over-month on a non-seasonally adjusted basis in July, after rising 0.1% in the previous month, while market analysts penciled in an acceleration to 0.2% in the seventh month of the year. On annual basis, the CPI climbed 0.4% in the same month, up from last month's final reading of 0.3%. In the meantime, the German Unemployment Change report published by the German Statistics Office on Thursday revealed that the unemployment rate in the country remained at 6.1% in July, whereas the number of unemployed people in the Euro zone's number one economy dropped by 7,000 in the reported month, compared to a fall of 6,000 registered in the preceding month, while economic desks anticipated a decline of 3,000 in July. The jobless rate in Germany stayed at the lowest level in the last 20 years. The European Central Bank aims to maintain inflation rates of below, but close to, 2% over the medium term.
The number of people filing for unemployment benefits in the United States last week rose more than expected, fresh figures from the Department of Labor revealed on Thursday. Initial jobless claims grew by 14,000 to 266,000 in the week ended July 23, compared to the previous week's revised figure of 252,000, while market analysts expected jobless claims to rise by 9,000 to 261,000 in the reported week. Nevertheless, the less volatile and closely watched four-week moving average fell 1,000 to 256,500 in the preceding week, the lowest level since April. Furthermore, this week marked the 73rd consecutive week of initial jobless claims remaining below the 300,000 level, the longest streak since 1973. Meanwhile, the number of people continuing to receive unemployment aid increased by 7,000 to 2.14 million in the week ended July 16, whereas the four-week average of continuing jobless claims dropped to the lowest level since November 2000. The Federal Reserve said on Wednesday that conditions in the US labor market improved significantly and that the latest indicators pointed to some increase in labor utilization. As markets expected, the US central bank left its key interest rates unchanged at its meeting on July 27, citing concerns over low inflation.
Upcoming fundamentals: Lots of European and US data
As today is the last trading day of the month, a lot of data is being released in the US and the European Union. First of all, the French CPI for July and French GDP for Q2 were published at 6:45 GMT. Next up will be the Spaniards, as they release second quarter GDP results at 7:00 GMT. At 9:00 GMT EU CPI estimate yearly change for July will be out, and in the same time the EU common unemployment rate for June will be out. Starting with the afternoon, data from the United States will begin incoming, as first at 12:30 the US annualized GDP, PCE, employment cost index and annualized GDP price index will all be released for the second quarter. Later on Fed's Williams will give a speech at 13:30 GMT, and fifteen minutes later, at 13:45 GMT, Chicago PMI for July will be published. Last but not least, UoM Confidence Final index will be out for July.
EUR/USD approaching 1.11 level on Friday
Daily chart: The common European currency surged on Thursday to 1.1076 by the end of day's trading session. In addition, it was more volatile during the session to the upside, as the pair touched the 1.1120 level. On Friday, the pair started day's trading session at 1.1075, and it continued to surge in accordance with the newly formed northwards aimed patter. In addition, the currency exchange rate faces no resistance levels up to the weekly R2 at 1.1134.Daily chart
Hourly chart: The hourly chart shows that the common European currency passed the weekly R1 at 1.1055 at midnight GMT to June 28. Since then the currency exchange rate has been slowly surging, as it has been a few times hindered by the upper Bollinger band. However, it is not a strong enough resistance to change the pairs course, as the EUR/USD pair is supported by the 20-hour SMA, lower Bollinger band and the before mentioned weekly R1. In addition, the 100 and 200-hour SMAs are moving upwards and are set to support the weekly R1 in the near future.
Hourly chart
SWFX bearish sentiment increases on Friday
OANDA trader bearish sentiment has increased compared to Friday's 55.13%, as, at the moment, 56.70% of OANDA open positions are short. In addition, SAXO Bank clients have slightly increased their bearish stance, as their open short positions are now at 62.98% compared to 58.58% of last trading session.