- SWFX market sentiment is 51% bullish
- Trader pending orders are 62% to sell
- Pair opened Thursday's session at the 1.0908 level
- Aggregate daily technical indicators bet EUR/USD will surge
- Economic events to watch over the next 24 hours: US Unemployment Claims; FOMC Member Bullard Speech
Donald Trump's election as the 45th president of the United States sent shock waves across the world. His victory allowed the Republic Party to maintain the Senate, as well as win the White House. According to the final figures, in the presidential race of 2016 Trump won 276 electoral votes. Despite the post-election uncertainty, the US economy is set to continue its expansion at a rate of 2%. Moreover, analysts still expect a rate hike from the Federal Reserve in December, as markets are likely to stabilize ahead of the monetary policy meeting. Once the news broke, the Mexican Peso dropped more than 13%, hitting its overnight low, whereas the price of gold advanced 4.9% to $1,337.4 per ounce. European stock markets fell around 2.3%, compared to a 9% plunge after Britain's decision to leave the European Union. However, European stocks managed to finish higher, with the FTSE rising around 1% after falling 2% at the start of the trading day. Separately, the Energy Information Administration reported on Wednesday that US crude oil inventories increased 2.4 million barrels in the week ended November 4, following the preceding week's rise of 14.4 million barrels and surpassing the 1.3 million barrel gain forecast.
German factory orders dropped unexpectedly in September amid weak domestic demand and sluggish overseas demand, official data showed on Monday. According to Destatis, orders for German-made products fell 0.6% in the reported month, the biggest drop since April, after rising for two consecutive months, while market analysts expected a 0.2% increase. Meanwhile, the August gain of 1.0% was revised down to 0.9%. Despite the September drop, however, the overall growth of factory orders remained positive in the Q3. Destatis also pointed to improved sentiment indicators that provided hopes for a rebound in the industrial sector over the rest of the year. Nevertheless, analysts remained cautious, noting that the sector remained weak since 2013-2014. Domestic demand declined 1.1%, whereas foreign orders fell 0.3% in September. Factory orders from other countries in the Euro zone decreased 4.5% in the same month. The drop was mainly driven by lower demand for capital goods produced in the Euro zone's largest economy. Orders intermediate and consumer goods increased modestly. The German economy was expected to lose steam in the Q3 2016, after expanding 0.7% and 0.4% in the Q1 and Q2, respectively.
Upcoming fundamentals: US Unemployment and FOMC's Bullard
There are two notable events scheduled for today, which might affect the strength of the US Dollar and subsequently the EUR/USD currency exchange rate. First will be the US Unemployment Claims release at 13:30 GMT. However, more important might be the speech, which will be given by FOMC member Bullard at 14:15 GMT, as he might indicate what will happen with the FED under Donald Trump.
EUR/USD finds support in Brexit low at 1.0912
Daily chart: The common European currency found support against the US Dollar in the post-Brexit low level at 1.0912. Previously, on the US Election Day the currency exchange rate experiences high volatility, as Donald Trump won the race for the seat in the white house. During the day the pair touched the 1.13 level. However, by the end of Wednesday's trading the world calmed down and looked at the situation more pragmatic, without the hysteria of US media. Due to that, the Greenback even strengthened, and the rate fell to the Brexit low level, where it found support and is likely to surge to 1.10, where the weekly S1 is located at.Daily chart
Hourly chart: The hourly chart shows that after the initial spike of the Trump victory, the currency exchange rate fell even lower than the pre-election level, when it reached the Brexit low level. The Euro could not find support in the massive cluster of level of significance from 1.1109 to 1.1002 against the US Dollar. The cluster consists of the weekly and monthly PP, weekly S1, 20, 55, 100 and 200-hour SMAs, and now it is providing resistance to the rate. Due to that it is likely that after surging to the 1.10 level the pair is set to continue to move lower.
Hourly chart
Traders shift to the bullish side
SWFX traders are neutral bullish on the pair, as 51% of open positions are long. Meanwhile, 62% of trader set up orders are to sell the Euro.
On other marketplaces the shift of positions can be seen even more. OANDA traders have completely changed their outlook, as 60.94% of open EUR/USD positions are long on Thursday, compared to 52.99% short positions on Wednesday. Meanwhile, SAXO Bank clients have decreased their bearishness, as open short positions now add up to 53.32%, compared to 58.75% short positions during the previous trading session.