- SWFX market sentiment is 54% bullish
- Trader pending orders are 60% to sell
- Pair opened Wednesday's session at the 1.0649 level
- Aggregate daily technical indicators bet EUR/USD will fall
- Economic events to watch over the next 24 hours: German Unemployment Change; EU CPI Flash Estimate; ECB President Draghi Speaks; US ADP Non-Farm Employment Change; US Core PCE Price Index; US Personal Income; US Personal Spending; US Chicago PMI; US Pending Home Sales; German Bundesbank President Weidmann Speaks; FOMC Member Powell Speaks
Corporate lending in the Euro zone advanced at the fastest pace since June 2011 in October, while the total amount of currency in circulation fell, official figures showed on Monday. According to the European Central Bank, lending to firms rose 2.1% on a monthly basis in October, the fastest pace in more than five years, following the preceding month's gain of 2.0%. Lending to households climbed 1.8% on an annual basis in the same month, unchanged from the September reading, whereas market analysts anticipated a slight increase to 1.9%. A measure of the money supply in the region, known as M3, grew 4.4% year-over-year in October, down from the prior month's 5.1% and below the 5.0% increase market forecast. The Central bank's policymakers are widely expected to extend their quantitative easing program by six months at their next meeting on December 8. According to the OECD's latest forecasts published on Monday, the Euro zone is set to grow 1.7% in 2016 and 1.6% in 2016, both figures were revised up from the September estimates despite the post-Brexit uncertainties. Moreover, later on the same day, Mario Draghi said in his speech to the European Parliament that the economy managed to overcome major challenges caused by Britain's decision to leave the European Union.
German business sentiment remained unchanged in November, a private survey revealed on Thursday. The Munich-based Ifo economic institute reported on Thursday that its Business Climate Index came in at 110.4 in the reported month, while September's reading was unchanged at 110.4 in November, after the preceding month's reading was revised down to 110.4 from 110.5. Market analysts anticipated a slight increase to 110.6 points. The November figure suggests that executives remain positive about the country's economic growth, despite the uncertainties hanging over Brexit negotiations and Donald Trump's presidency. Back in October, the Index hit its highest level in more than two and a half years. In the meantime, the Current Assessment Index jumped to 115.6 in November from 115.1 points registered in the prior month, surpassing the 115.0 market forecast. The Business Expectations Index, which tracks sentiment in the next six months, declined to 105.5 during the reported period from 105.9 in October, falling behind analysts' expectations for 106.0. As a result, the Euro rose slightly against the US Dollar, trading at 1.0557 from 1.0556 ahead of the release, but fell against the Sterling, trading at 0.8493 from 0.8494 ahead of the data.
Upcoming fundamentals: End of the month
To describe all of the data releases, which will and could affect the EUR/USD rate, would be too long. Due to that in this paragraph the most notable and proven macroeconomic data releases and events are noted. First of all, Mario Draghi is set to speak at 12:30 GMT, and might reveal new information. However, Draghi has given a lot of speeches in the past week, and most things have been already said. At 13:15 GMT traders have to look out for the ADP Non-Farm Employment Change data, which is the first indicators that gives a real insight into the monthly developments in the employment sphere in the US. The rest of the data might just influence the markets, if there would be a large divergence from the average market forecasts.
EUR/USD slightly above 1.06 mark
Daily Chart: On early Wednesday morning the common European currency retreated after encountering resistance against the US Dollar. The currency exchange rate hit the first weekly resistance level at 1.0659 and began to retreat until it fell to the second monthly support level at 1.0632, which hindered the fall. However, it is most likely that the Euro will continue its retreat throughout Wednesday's trading session. Previously, during Tuesday's trading session the currency pair fluctuated in a range from 1.0565 to 1.0653 and managed to score some gains by the end of the session.Daily chart
Hourly chart: The hourly chart for the EUR/USD pair reveals that the pair traded flat on Tuesday morning until it suddenly found support shortly after 13:00 GMT and surged to the weekly R1 at 1.0659. The pair has bounced off the weekly R1 and most recently dropped below the support provided by the monthly S2 at 1.0632. These facts and what is seen at the moment of writing combined indicate that the pair is and will continue to fall.
Hourly chart
Trader reduce the bullish sentiment
Traders once more slightly decreased their bullish outlook, as 54% of open positions were long on Wednesday, compared to 55% on Tuesday. Meanwhile, pending commands were bullish, as 60% of trader set up orders were to sell the Euro.
OANDA traders decreased their bullish outlook, as 63.01% of open EUR/USD positions were long on Wednesday morning, compared to 65.78% long positions on Tuesday. In addition, SAXO Bank clients have majorly decreased their bullish outlook, as 50.41% open positions are long, compared to 55.55% during the previous trading session.