- 66% of pending orders are set to sell
- Open positions remain positive in 55% of cases
- Key resistance lies around 1.10
- Short term demand can be found at 1.0893
- Economic events to watch in the next 24 hours: Spanish Unemployment Change (Jul), US Factory Orders (Jun)
The Euro zone's manufacturing sector continued to expand strongly in July amid the turbulent Greek debt crisis during the month. The final manufacturing PMI for the Euro area slid to 52.4 in July, down from 52.5 a month earlier, but overshooting economists' forecast for 52.2 points. New order growth weakened last month, with the sub-index falling to 52.2 from 52.7 as factories increased their prices for a second month in a row, albeit at a weaker rate than in June. Business activity in the German manufacturing sector remained in the green zone for the eighth consecutive month, albeit with a weaker reading, the fresh Markit data showed. July's final manufacturing PMI edged lower to 51.8, down from the final reading of 51.9 points in the prior month.
However, in France, the region's second biggest economy, factories failed to keep momentum in the reported month, with the final manufacturing PMI falling to 49.6, compared with the final reading of 50.7 recorded in June. At the same time Spanish manufacturing sector continued to enjoy a robust performance, as the corresponding gauge came in at 53.6 in July, slightly falling from June's 54.5.
Upcoming fundamentals: US factory orders to rebound strongly in June
Statistics on factory orders in the US will be released by 14:00 GMT on Tuesday. Orders are currently forecasted to surge 1.8% in June, following a 1% drop a month before. In the meantime, unemployment level in Spain is likely to continue decreasing at a moderate pace, as economists see the number of people unemployed down by 45,600 in July. This data is due at 7:00 GMT today, and it will probably mark a sixth consecutive month of falling joblessness.
EUR/USD still below 1.10
EUR/USD traded in a soft downtrend on Monday, while overall this currency pair remained hovering below the 1.10 mark. The short-term outlook will be somewhat bearish, as long as the long-term downtrend/recent high around 1.11 stay intact. Additional pressure on bulls should be created by the monthly/weekly PP at 1.10. Bears are going to aim at the Jul 30 low near 1.0893, which is followed by the May/Jul low at 1.0818/08. On the other hand, daily and weekly technicals are neutral at the moment.Daily chart
Meanwhile, the one-hour chart tends to concentrate our attention even more on the mentioned downtrend, which can be found in the area of 1.11. Unless this mark is crossed, the pair will most likely continue edging lower. Moreover, the bearish scenario is proved by the penetration of another local uptrend on July 29.
Hourly chart
SWFX sentiment improves, orders crash below 35%
Meanwhile, percentage of OANDA bullish positions accounts for just 40% at the moment, while SAXO Bank market participants are also remaining strongly pessimistic towards the common currency, as their share of longs takes up just 36%.