- Share of long pending orders in 100-pip range tumbled from 61% to 53%
- Long open positions rose further from 46% to 49%
- Strongest resistance is placed at 1.1409/66, interim supply at 1.1295
- Short traders to wait for momentum from the closest Fibonacci retracement
- Economic events to watch in the next 24 hours: Euro zone PPI (Jul); Spanish Unemployment Change (Aug); US ADP Employment Change (Aug), Non-Farm Productivity (Q2), Crude Oil Inventories (Aug 21) and Factory Orders (Jul)
The jobless rate in the 19-nation currency bloc declined more than expected in July, reaching the lowest level in more than three years. The Euro zone unemployment stood at 10.9% in the reported month, the first time below 11% since February 2012, and compared with 11.1% registered in June. In the 28-member European Union, the jobless rate was 9.5%, the lowest level since June 2011. There remained a huge disparity between European countries. The lowest jobless rates were in Germany, at 4.7%, followed by the Czech Republic and Malta, both at 5.1%. The highest rate, of 25.0%, was in Greece, followed by Spain at 22.2%. Despite its multi-year low, unemployment in the Euro bloc remains a hurdle, as it still stood well above the 7.5% levels seen before the outburst of the global financial crisis.
Meanwhile, Italy's final 2015 second-quarter GDP data showed that the Euro zone's third biggest economy expanded at a rate of 0.3% on a quarterly basis, keeping the same pace of growth booked in the first three months of this year. On an annual basis, the country's economic output increased 0.7% in the reported period, compared to 0.1% growth booked in the previous quarter. The economic recovery may be attributed to a weakening Euro, lower oil prices and the quantitative easing programme enacted by the European Central Bank.
Upcoming fundamentals: Euro zone producer prices to continue falling
The change in prices received by the Euro zone's manufacturers of goods is estimated to remain deeply in red in July, when the data is published at 9:00 GMT today. The annual indicator is set to decline by 2.1%, down from a 2.2% drop in June, while on a monthly basis producer prices are likely to show a 0.1% decrease. Meanwhile, economists see the total number of unemployed in Spain to grow by 35,300 in August, after a surprising 74,000 drop in the preceding month. This data is due at 7:00 GMT.
EUR/USD was stopped by 23.6% Fibo
EUR/USD advanced for a third working day in a row on Tuesday, but the cross failed to overcome the nearest resistance at 1.1295 (23.6% Fibo) and close above the 1.13 round level. According to daily technical indicators, additional testing of this mark is possible in the next 24 hours. However, positive US employment data may push the Dollar substantially upwards today. Additional bearish momentum is expected to be present, in case EUR/USD falls below 20-day SMA/yesterday low at 1.1225.Daily chart
The one-hour chart shows that a decline of the pair is the most realistic scenario at the moment. While trading below both 200-hour SMA and 23.6% Fibo retracement, it has also bounced back from the upper trend-line of the Aug 28-Sep 1 bullish channel. As a result, we may observe the losses extending down to the 1.12 area in the short term.
Hourly chart
SWFX sentiment approaches 50%, pending orders are losing bullish momentum
The share of bullish positions at OANDA amounts to 47.55% at the moment, while SAXO Bank market participants are even more pessimistic towards the common currency, with their portion of longs taking up only 36% of all open trades on Wednesday, September 2.
Spreads (avg,pip) / Trading volume / Volatility
Community members expect Euro to resume growing versus the US Dollar this week
Despite EUR/USD's losses throughout the previous trading week, Dukascopy traders are still bullish with respect to the EUR/USD currency pair, as more than 57% of them see the Euro higher by September 4.
A proponent of a near-term growth, khalidamassi, suggests that "After strong move of EUR/USD last week to 1.17, then falling to 1.12, next week's recovery to 1.15 is very likely as the pair closed above 1.12 for the second week, but clear break below 1.12 will dampen expected bullish view for next week."