- Share of long pending orders in 100-pip range dropped to 35%
- There is a slight advantage of long open positions in the market (51%)
- Key resistance lies at 1.1295 (23.6% Fibo, weekly R1, recent highs)
- Bears to push the price below several SMAs around 1.11
- Economic events to watch in the next 24 hours: Greek CPI (Aug); German 10-y Bond Auction; US JOLTS Job Openings (Jul)
The Euro zone economy grew a revised 0.4% in the second quarter, while preliminary data showed a slowdown to just 0.3%. The Eurostat also raised its estimate for growth in the first three months of the year, increasing it to 0.5% from 0.4%. Compared with the same quarter of the previous year, seasonally adjusted GDP rose by 1.5% in the Euro area and by 1.9% in the whole European Union. A revival in exports in the Euroland was among the crucial factors, which helped to support growth in the second quarter. Exports increased by 1.6% in the June quarter, mainly due to the Euro depreciation, which allowed the Euro zone exporters to grab a larger share of world demand. However, domestic demand slowed during the second quarter, with household consumption easing and investment spending falling by 0.5% compared with the first three months of the year.
In the meantime, the report from the Euro area's largest economy also showed quite positive results, as Germany booked a higher trade surplus in July compared with the previous month. According to the latest reading, Germany's foreign trade generated a non-seasonally adjusted surplus of €25.0 billion in the reported period, up from the €24.1 billion registered in the prior month. Moreover, exports rose 2.4% following a 1.1% decline in June, and imports advanced 2.2% compared with a negative 0.8% a month ago.
Upcoming fundamentals: US job openings to pick up in July
The majority of Wednesday fundamentals will be released outside the EU or US regions. However, among remaining, the Greece's inflation reading is due at 9:00 GMT, while Germany is going to hold a ten-year government bond auction later in the day. Meanwhile, US job openings have probably risen from 5.25 million in June to 5.30 million in July as labour market continues to improve in the world's biggest economy.
EUR/USD loses momentum after Tuesday's rise
EUR/USD gained around 50 pips on Tuesday and closed above the nearest resistance, namely the weekly pivot point and 20-day SMA at 1.1191. However, today the currency pair is back below both of these levels as bears are regaining strength. We are looking at a cluster of moving averages in the 1.1114/1.1085 area, which is going to be targeted by bears in the short-term. Alongside, the bullish case is less likely, while any possible rally should be contained by recent highs at 1.13.Daily chart
In the one-hour chart the EUR/USD currency pair is hovering slightly below the 200-hour SMA, currently at 1.1204. Signals given by daily technical indicators worsened in the past 24 hours, meaning that the probability of a development above this mark and 23.6% Fibonacci retracement is unlikely in the nearest future.
Hourly chart
SWFX sentiment hovers around 50%, pending orders retreated yesterday
Meanwhile, the share of bullish positions at OANDA amounts to 44% at the moment, but SAXO Bank market participants are even more pessimistic with respect to the common currency, as their portion of the longs takes up only 39% of all open trades in the morning on Wednesday.
Spreads (avg,pip) / Trading volume / Volatility
Community members have a broadly neutral outlook on the pair this week
The participants of our weekly Community Forecasts quiz decided to become more bearish on the Euro, as 53% of all votes are negative. At the same time, the average closing price for Friday of this week is located above 1.12.
Among traders, Jignesh claims that the Euro received a bearish push lower after the Mario Draghi's speech. He expects rallies to be sold throughout the week. khalidamassi also predicts bearish movement by saying that "EUR/USD failed last week to hold above 1.12, now this level will play a resistance role, as the pair holds below it and may reach 1.085-1.09."