- SWFX market sentiment is 57% bearish
- Pending orders are 57% to sell
- Pair opened Monday's session at 1.0758
- Upcoming Events: Low impact data
US US companies created more jobs than expected last month, following the disappointing December figure. The Bureau of Labor Statistics revealed on Friday that nonfarm payrolls rose 227,000 in January, compared with the preceding month's upwardly revised 157,000, while market analysts anticipated an increase to 170,000 in the reported month. Meanwhile, the unemployment rate came in at 4.8% last month, up from December's reading of 4.7%. Friday's data also showed that average hourly earnings grew 0.1% in January, following the prior month's downwardly revised 0.2% and falling behind the 0.3% rise market forecast. Earlier this week, the Federal Reserve declined to raise interest rates. However, policymakers maintained their projection of three hikes in 2017.
Separately, the Institute of Supply Management reported its Non-Manufacturing Purchasing Managers' Index fell to 56.5 in January from the preceding month's 57.2, whereas analysts penciled in a slight decrease to 57.0 points. Overall, the slight decrease in the headline Index was mainly driven by the weaker New Orders Index, which dropped to 58.6 from 60.7 in the previous month; however, order backlogs held on the same level. Moreover, the ISM said the Employment Index advanced to 54.7, while the Price Index surged to 59.0 from 56.0, representing an increase in inflationary pressures.
Upcoming events: No high impact data
There are no high impact data releases that could significantly shake up markets on Monday. A set of low impact data, such as the Sentix investor confidence gauge in the Euro zone, as well as US labor market conditions, which come out at 9:30 GMT and 15:00 GMT respectively could put some pressures, but are unlikely to lead to a shake in markets.
EUR/USD gives in to senior channel
Daily Chart: Following repeated attempts to claim the upper boundary of the senior ascending channel, EUR/USD failed at the area once more and established the area as a major supply level, meaning that it is unlikely that the pair will push through 1.0796 anytime soon. There is a support lying just below at 1.0744 – a reasonable target for the next couple of hours, but likely to break during the trading session. The ultimate downside target lies at 1.0683, the junior channel bottom trend-line, and will be tested if the rate continues to respect the senior channel boundary and shows no stickiness.Daily chart
Hourly chart: The hourly chart shows a similar – bearish – picture as the rate slides through a cluster of SMAs easily and steadily distances itself from the senior channel boundary. The rate had also sketched a small-scale rising wedge, which it broke to the downside as expected, giving more credibility to our falling scenario. The next area to battle for access to levels below lies at 1.0747/41 and could spill some stickiness into the motion, putting the bottom boundary of the junior channel out of reach for today's trading session.
Hourly chart
Bearish sentiment persists
SWFX traders have entered deeper negative territory regarding the pair, as 57% of open positions are now short. Similarly, 57% of pending orders are to sell the Euro.
OANDA traders remain bearish, regarding the pair, as 55.19% of open EUR/USD positions were short on Monday, compared to 56.61% on Friday. Meanwhile, SAXO bank traders have slightly increased their bearish outlook, as 63.15% of open positions are short, compared to 60.80% previously.