- Share of long pending orders in 100-pip range tumbled from 53% to 37%
- Long open positions are neutral at the moment
- Strongest resistance is placed at 1.1409/66, interim supply at 1.1295
- Short traders to target 55/100/200-day SMAs in the short-term
- Economic events to watch in the next 24 hours: Euro zone Services PMI (Aug) and Retail Sales (Jul); ECB Interest Rate Decision and Press Conference; US Services PMI (Aug), Trade Balance (Jul), Unemployment Claims (Aug 29) and ISM Non-Manufacturing PMI (Aug)
The jobless rate in the 19-nation currency bloc declined more than expected in July, reaching the lowest level in more than three years. The Euro zone unemployment stood at 10.9% in the reported month, the first time below 11% since February 2012, and compared with 11.1% registered in June. In the 28-member European Union, the jobless rate was 9.5%, the lowest level since June 2011. There remained a huge disparity between European countries. The lowest jobless rates were in Germany, at 4.7%, followed by the Czech Republic and Malta, both at 5.1%. The highest rate, of 25.0%, was in Greece, followed by Spain at 22.2%. Despite its multi-year low, unemployment in the Euro bloc remains a hurdle, as it still stood well above the 7.5% levels seen before the outburst of the global financial crisis.
Meanwhile, Italy's final 2015 second-quarter GDP data showed that the Euro zone's third biggest economy expanded at a rate of 0.3% on a quarterly basis, keeping the same pace of growth booked in the first three months of this year. On an annual basis, the country's economic output increased 0.7% in the reported period, compared to 0.1% growth booked in the previous quarter. The economic recovery may be attributed to a weakening Euro, lower oil prices and the quantitative easing programme enacted by the European Central Bank.
Upcoming fundamentals: Euro zone service industry to continue expanding
Several Euro zone countries including Germany, France and Spain will release their Services PMI indicators starting from 7:15 GMT. The pan-European PMI for this industry is in turn estimated to stay flat at 54.3 points in August, underlying continuous growth. Meanwhile, the ECB will make an interest rate decision by 11:45 GMT, which will be followed by Mario Draghi's press conference 45 minutes later. He is expected to be asked about the possibility of extending asset purchases beyond the current time target of September 2016.
EUR/USD corrects lower to 20-day SMA
EUR/USD was pushed to the downside during the trading session on Wednesday as the pair erased all gains from the previous day. As expected, the Euro managed to reach Tuesday low at 1.1225 by mid-night, where the 20-day SMA is located as well at the moment. In case bears consolidate the exchange rate below both of these levels, we should see EUR/USD falling down to the next cluster of supports around 1.1120/00. There the pair is going to meet a number of moving averages on different time frames, which may build a reliable support for bulls in the mid-term.Daily chart
The one-hour chart shows that a decline of the pair is the most realistic scenario at the moment. While trading below both 200-hour SMA and 23.6% Fibo retracement, it has also bounced back from the upper trend-line of the Aug 28-Sep 1 bullish channel. Moreover, after falling down in the direction of 1.12, EUR/USD is likely to test this mark in the nearest future.
Hourly chart
SWFX sentiment neutral, pending orders slumped considerably
The share of bullish positions at OANDA amounts to 44.77% at the moment, while SAXO Bank market participants are even more pessimistic towards the common currency, with their portion of longs is taking up only 39% of all open trades on Thursday, September 3.
Spreads (avg,pip) / Trading volume / Volatility
Community members expect Euro to resume growing versus the US Dollar this week
Despite EUR/USD's losses throughout the previous trading week, Dukascopy traders are still bullish with respect to the EUR/USD currency pair, as more than 57% of them see the Euro higher by September 4.
A proponent of a near-term growth, khalidamassi, suggests that "After strong move of EUR/USD last week to 1.17, then falling to 1.12, next week's recovery to 1.15 is very likely as the pair closed above 1.12 for the second week, but clear break below 1.12 will dampen expected bullish view for next week."