- SWFX market sentiment is 56% bearish
- Trader pending orders are 56% to sell
- Pair opened Thursday's session at 1.0768
- Upcoming Events: ECB President Draghi Speaks; US Unemployment Claims
Inflation in the Euro zone rose more than expected in January but remained below the European Central Bank's inflationary target. On Tuesday, Eurostat reported consumer prices advanced 1.8% on an annual basis in January, the highest level since February 2013, following December's 1.1% and surpassing analysts' expectations of 1.5%. In the meantime, the core Consumer Price Index, which excludes volatile items such as energy prices, came in at 0.9% yearover-year in January, unchanged from December and in line with market forecasts. Nevertheless, the ECB President Mario Draghi said policymakers would look beyond energy prices and seek further signs of rising underlying inflation in order to change the course of the Bank's monetary policy. Tuesday's data showed energy prices climbed 8.1% on a yearly basis in January after rising 2.6% in the preceding month, whereas the price of unprocessed food rose 3.3% year-over-year.
Separately, Eurostat reported the Euro zone's economy advanced an annualized 2.0% on quarter in the three months to December 2016, while the US economy, the world's largest, grew at an annualized pace of 1.9% in the same period. Strong economic growth helped to lower the unemployment rate in the region, which dropped to 9.6% in December, the lowest level since May 2009.
Upcoming events: Mario Draghi and US Unemployment
During Thursday's trading session the EUR/USD currency exchange rate will be vulnerable to two fundamental events. First and almost sure to affect the Euro's strength will be the speech set to be given by Mario Draghi at 12:15 GMT. Later in the day a data release in the US is set to affect the financial markets, as the US Unemployment Claims will be published at 13:30 GMT.
Euro struggles on Thursday
Daily Chart: On Thursday morning the common European currency gained against the US Dollar, as the currency exchange rate approached the 1.08 mark. However, the Euro struggled to gain further gains, as it was being kept down by the 100-day SMA at 1.0792. It is highly unlikely that the pair will move upwards and score additional gains, as already at 1.0803 the long term pattern's upper trend line is located at. The trend line has kept the rate down for the past two trading sessions, initially stopping a jump of the Euro on Tuesday.Daily chart
Hourly chart: By doing some work on the hourly chart, an analyst can pinpoint the exact location of the long term descending channel' upper trend line. During Thursday's trading session the trend line is set to slowly move lower from 1.0803 to 1.0799 by the end of the day. However, on the hourly chart it has no additional levels of significant that would strengthen it. Previously, the upper Bollinger band on the hourly chart provided additional resistance. Due to that it is recommended to keep watching closely, as there is a possibility of the pattern being broken.
Hourly chart
Bearish sentiment decreases
SWFX traders remain bearish regarding the pair, as 56% of open positions are short on Thursday. Meanwhile, 56% of trader set up orders are to sell the Euro.
OANDA traders have decreased their bearish outlook, regarding the pair, as 54.90% of open EUR/USD positions were short on Thursday, compared to 60.09% on Wednesday. Meanwhile, SAXO bank traders have done the same, as 64.55% of open positions are short, compared to 67.56% previously.