- Share of buy orders increased from 36 to 41%
- Sentiment among the SWFX market participants continues to deteriorate
- A test of the upper trend-line of the emerging channel at 1.1080 is likely to trigger a sell-off
- Support is in the region of 1.10
- Upcoming events: German Ifo Business Climate, US (Core) Durable Goods Orders
The Euro zone's manufacturing sector failed to make progress in July amid the Greek debt crisis during the month, preliminary data from Markit showed. The flash manufacturing PMI for the Euro area came in at 52.2 in July, down from 52.5 in the prior month. The German manufacturing sector faced a slight decline in the pace of growth, with the corresponding reading falling to 51.5, compared with June's final 51.9 points. At the same time, business activity in the French manufacturing sector slowed, as the PMI slid to 49.6 in the reported month, down from 50.7 reported in June and below expectations of 50.8.
Meanwhile, the Euro zone's services sector continued to enjoy a robust activity, albeit at a slightly slower pace compared to the previous month. The region's services PMI reading booked 53.8 points in July, down from 54.4 in June. The German services sector appeared to be on a slightly weaker footing in the measured month, sliding to 53.7 points, down from the 53.8 reading in June. The flash services PMI in France came in at 52.0 in July, compared to the 54.1 seen a month earlier and overshooting analysts' expectations, who had called for a 53.8 result. Consequently, the closely-watched composite PMI for the Euro area came in at 53.7 points, compared to 54.2 in June. Market watchers had expected a 54.0 result.
Not your usual Monday
While usually Mondays are characterised by low volatility, this one is likely to be different. The reason is two major fundamental events. From the Euro side this is the German Business Climate, which is expected to improve after the disappointment a month earlier. From the Dollar side, this is the Durable Goods Orders, which are also expected to rebound after a large drop in May.EUR/USD attacks 100-day SMA
The bulls are currently eroding the 100-day SMA, and if they succeed, the next target will be a cluster of resistances around 1.1150. There the monthly pivot point joins forces with the weekly R2 level and the 55-day SMA. On the other hand, if the price fails to gain a foothold above 1.10, the focus will return to the May low. In any case, the technical indicators, especially in a monthly chart, do not warrant a prolonger recovery.Daily chart
Hourly chart
Bulls lose ground
The attitude towards the Euro among the OANDA and Saxo Bank traders is even worse. In the first case 39% of positions are long, while in the second only 37% of traders expect the single currency's appreciation against the US Dollar.