- SWFX market sentiment is 61% bearish
- Trader set up pending orders are 51% short
- Pair opened Wednesday's session at the 1.1256 level
- Aggregate daily technical indicators bet EUR/USD will remain unchanged
- Economic events to watch over the next 24 hours: US Jolts Job Openings (July); French Non-Farm Payrolls (Q2)
Fewer jobs were created than expected in the United States last month, official data revealed on Friday. According to the Labor Department, total nonfarm payroll employment in the country jumped 151,000 in August, following July's upwardly revised gain of 275,000, whereas market analysts expected the economy to add 180,000 new jobs in the reported month. Over the past three months, job gains averaged 232,000, compared with 182,000 for the first eight months of 2016. Furthermore, average hourly earnings advanced 0.1%, down from July's 0.3%, while the average workweek dropped to 34.3 hours in the same month from July's 34.4, leading to a 0.2% decline in the index of aggregate weekly hours. Over the past month, job growth in construction and manufacturing was weak, while strong in retail, healthcare, leisure, and government sectors. The headline unemployment rate remained unchanged at 4.9%, whereas economic desks anticipated a slight deceleration to 4.8% during the reported period. Average hourly earnings held steady at 2.4% in the same month. On Wednesday, payroll processor ADP said US companies created 177,000 new jobs in August, slightly surpassing the 174,000 market forecast. The report put into question the possibility of an interest rate increase by the Federal Reserve at its September meeting.
US manufacturing activity fell in the red territory during August despite last month's positive reading. The Institute for Supply Management's Manufacturing PMI came in at 49.4 points in the eight month of the year, following July's 52.6 hike and falling behind the 52.0 market forecast. The manufacturing sector contracted for the first time in five months; however, the overall economy expanded for 87 consecutive months, the report from the ISM showed on Thursday. Other data released by the Labor Department showed that the number of Americans filing for unemployment benefits rose to 263,000 in the week ended August 27, compared to 261,000 claims registered in the previous seven days, while economic desks anticipated a steeper increase to 265,000 during the reported period. The four-week moving average of claims, considered a better measure of labor market trends, dropped 1,000 to 263,000. This marked 78 consecutive weeks of claims below the 300,000 level, the longest streak since 1973. In the meantime, continuing jobless claims increased 14,000 to 2.16 million in the week ending August 20. As the US economy approaches full employment, there is little scope for significant further declines in claims.
Upcoming fundamentals: US Jolts Job Openings; French Non-Farm Payrolls.
Wednesday will be a quiet day for the EUR/USD pair, as the German Industrial Production has been released for July, and it disappointed experts, which forecasted a slight growth. The rest of the first half of the day will be quiet. Afterwards at 14:00 GMT US JOLTS Job Openings for July will be released. Moreover on early Thursday morning the French will release the Non-Farm Payrolls data for the second quarter of 2016.
EUR/USD jumps above 1.1250
Daily chart: The Common European currency is trading near the opening price against the US Dollar on Wednesday morning. However, it did fall to the weekly R1 at 1.1230 and rebounded against it during the night to continue a surge, which began on Tuesday. Previously, the currency exchange rate jumped on Tuesday and broke through a strong resistance cluster from 1.1176 to 1.1230. Afterwards, the pair reached above the 1.1250 level, where it ended the day's trading session. As the rate faces no resistance up to the level of 1.1305, it is most likely set to surge during today's trading.Daily chart
Hourly chart: The hourly chart for the EUR/USD pair shows, that the rate was trading flat until 14:00 GMT on Tuesday. At that time the currency exchange rate jumped from 1.1163 to 1.1256, as fundamental data from the US revealed US Dollars weakness. Afterwards, the rate resumed flat trading, as it fluctuates near the 1.1250 level.
Hourly chart
SWFX bearish sentiment increases
OANDA trader bearish sentiment has increased compared to Tuesday's 51.84%, as, at the moment, 57.64% of OANDA open positions are short. In addition, SAXO Bank clients have increased their bearish stance, as their open short positions are now at 68.02% compared to 61.82% of last trading session.