- SWFX market sentiment is 55% bearish
- Pending commands in the 100-pip range are bearish (51%)
- Pair is struggling at 1.1357
- Aggregate daily technical indicators bet EUR/USD will remain unchanged
- Economic events to watch over the next 24 hours: German Industrial Production change (April); European Union quarterly and yearly GDP (1Q); US Unit Labor Costs (1Q)
German factory orders have declined significantly, as demand for investment goods from outside the Euro zone slumped in April, strengthening worries about stagnation in the German industry. According to the latest release of the Economy Ministry in Berlin, the data dropped 2% from the prior month, when it rose to a revised 2.6%. The reading, which is usually volatile, is incomparable to economists' predictions for a decline of 0.5%. Moreover, orders slid 0.5% from a year earlier. On a yearly period, the index also went down, losing 0.5% against forecast of 0.6% of expansion. Overall, following decrease was provoked by a 4.3% drop in foreign orders, primarily from outside the 19-nations' region, while domestic orders increased by 1.3%. Meanwhile, within foreign demand, new orders from the Euro area surged 2.5% for the previous month, while new orders from other countries slipped 8.3%. Orders for intermediate goods, in turn, added 4.8%, while the manufacturers of capital goods showed a monthly fall of 6.1%. For consumer goods, a decrease in new orders of 1% was registered. In the meantime, the Bundesbank last week cut its forecast for German growth in 2016 and 2017, simultaneously affirming a robust economic trend as well as strengthening labor market conditions.
Advertised Australian job openings grew in May, suggesting labour demand continues to show resilience amid shaky economic settings. Job ads were 2.4% higher in May than a month earlier, ANZ's Job Advertisement Series reported, following a revised 0.6% decline in April. Newspaper listings tumbled 12.6% over the month, while internet job ads were up 2.6%. The data series captures job ads from Australia's state capitals and comes a week ahead of Australia's official employment statistics for May. In April, the Australian economy added a net 10,800 jobs, helping to keep the unemployment rate at a two-and-a-half-year low of 5.7%. Labour demand moderated significantly in early 2016, after Australia recorded the biggest annual gain in jobs since 2006 last year. Meanwhile, a separate report showed that Australian consumer prices fell in May, according to a monthly gauge, adding to concerns over the soft state of Australia's inflation. Consumer prices fell 0.2% month-on-month in Australia in May, according to the TD SecuritiesMelbourne Institute Inflation Gauge, following a 0.1% increase in April and no change in March. The annual change in inflation, according to the gauge, slowed from 1.5% to just 1.0%, the weakest since the series began almost a decade ago.
Upcoming fundamentals: European Union's GDP and US Unit Labor Costs
There are few upcoming and notable fundamental data release today. First will be the European Union quarterly released, quarter on quarter and yearly basis gross domestic product changes at 9:00 GMT. The quarterly GDP change is forecasted to be an increase of 0.5% and on a year to year basis 1.5%. Afterwards at 12:30 GMT will follow the US Unit Labor Costs quarterly data, which is expected by experts to be at 4% and previously was 4.1%.
EUR/USD remains unchanged on Monday
Daily chart: The Euro was volatile against the US Dollar yesterday moving in a range from 1.1326 to 1.1393. However, the currency exchange rate ended day's trading session exactly where it started at 1.1353. At the moment the currency pair has went up a little bit and is trading at 1.1356. The EUR/USD pair is located above the weekly and monthly pivot points around 1.1280, which it would face if it depreciates. In addition, the 55-day SMA is providing additional support at 1.1305. In the meantime, in case of the European currencies appreciation against the Greenback it could move freely until the first weekly and monthly resistances at around 1.1465. Aggregate technical indicator forecasts no change for the pair today.Daily chart
Hourly chart: In the meantime, the hourly chart shows that the Euro surge against the US Dollar on Monday was stopped by the resistance of the upper Bollinger band. The European currency struggled against it, but nevertheless bounced off and has already reached the middle Bollinger band. In addition, the pair has now passed below the daily pivot point and faces the lower Bollinger band at 1.1337 and daily S1 at 1.1322.
Hourly chart
SWFX traders increase bearish sentiment
OANDA market sentiment is also more bearish today, as 59% of open positions are short compared to 58% yesterday. Alongside, SAXO Bank clients have increased their bearish positions by almost 2%, as their open short positions are now at 66.81%.