- Share of long pending orders in 100-pip range jumped above 50%
- Long open positions are in the majority with 51%
- Bulls are waiting for momentum moving averages at 1.1119/1.1079
- Additional demand is provided by weekly S1 at 1.1050 this week
- Economic events to watch in the next 24 hours: German Industrial Production (Jul) and Trade Balance (Jul)
German factory orders dropped more than expected in July, dragged down by weak foreign demand. Industrial orders in the Euro zone's number one economy plunged 1.4% following a revised 1.8% rise in June. Measured on an annual basis, the reading dropped 0.6% in the measured month after a revised 7.0% increase in June, whereas economists had expected the gauge to climb 0.4%. German exports are struggling with a potential cooling of global trade as China's economy, the world's second biggest economy, slows, meaning companies may have to rely on domestic demand. Nevertheless, the German economy is set for robust growth, supported by record-low unemployment and increasing wages.
Exports orders plunged 5.2% in July as domestic demand surged 4.1%, the Economy Ministry reported. Orders from outside the 19-nation Euro area plummeted 9.5%, and orders from within the currency region rose 2.2%. Orders for consumer goods decreased 6.3%, investment goods orders dropped 1.6%, and basic goods orders declined 0.2%. Manufacturing sector activity in Germany accelerated in August to reach a fresh 16-month peak, according to Markit. German manufacturing PMI rose to 53.3 points, following the 51.8 posted for July, which was also slightly better than 53.2 points forecast by the economists.
Upcoming fundamentals: German trade surplus to stay above 20 billion euros
On Monday the German manufacturing output data for July has already been released slightly worse than expected, as it advanced 0.7% versus a 1.1% estimate. Additionally, there are no fundamentals expected from both EU and US today. However, tomorrow morning the Germany's trade balance statistics will be due at 6:00 GMT. At the moment analysts see exports rising 0.25% in July, while imports have probably picked up 0.5%, which will hold the positive trade gap at 22 billion euros.
EUR/USD was rejected by 200-day SMA
Disappointing US non-farm payrolls resulted in the higher Euro versus the Dollar on Friday. The currency pair bounced off the 100-day SMA, after unsuccessful attempts to test the next support represented by the 200-day SMA at 1.1087. The near term outlook is quite mixed at the moment, even though bulls seem to have slightly more advantages over bears. Key demand is created by the cluster of moving averages, which is reinforced by weekly S1 at 1.1050. On the other hand, gains are anticipated to be capped by the weekly pivot point/20-day SMA at 1.1191.Daily chart
The one-hour chart shows that EUR/USD was sent below the lower trend-line of the bullish channel. This fact is supporting bears at the moment. We should also underline that EUR/USD is hovering below both 200-hour SMA and 23.6% Fibonacci retracement at 1.1295/47, respectively. However, a location of 100-day SMA at 1.1119 (daily chart) makes the negative case less likely to be successful in the near term.
Hourly chart
SWFX sentiment and pending orders positive at 51%
Meanwhile, the share of bullish positions at OANDA amounts to 43.83% at the moment, while SAXO Bank market participants are more pessimistic towards the common currency, with their portion of longs taking up only 39% of all open trades on Monday, September 7.