- Share of long pending orders in 100-pip range has added 24% since Wednesday
- Market sentiment is neutral at the moment
- After crossing 1.1295, bulls to aim at Jun high (1.1437)
- Additional supply is placed at 1.1466 (May high)
- Economic events to watch in the next 72 hours: German CPI (Aug); Spanish CPI (Aug); Italian Industrial Output (Jul); US PPI (Aug), Reuters/Michigan Consumer Sentiment Index (Sep) and Monthly Budget Statement (Aug); Eurogroup Meetings
The number of Americans seeking first-time unemployment benefits declines last week, highlighting the persistent strength of the labour market. Initial jobless claims, a proxy for layoffs across the country, dropped by 6,000 to a seasonally adjusted 275,000 in the week ended September 5, according to the Labor Department. Moreover, claims for the prior week were revised down to 281,000 from the initially reported 282,000. The four-week moving average of claims, which strips out weekly volatility, climbed by 500 to 275,750 last week. Claims have remained below 300,000 for 27 consecutive weeks, the longest such streak in more than 40 years. Claims below 300,000 generally indicate robust hiring and a healthy labour market.
The Labor Department said last week the US economy created 173,000 jobs in August, the weakest monthly gain since March, while the unemployment rate slid to 5.1%. That leaves Fed policy makers with a mixed picture of the world's number one economy as they head into a crucial policy meeting next week. Many economists expect the central bank to begin hiking interest rates for the first time in nearly a decade as soon as this month. However, global turmoil, coupled with a stronger Greenback and falling oil prices, has complicated that decision.
Upcoming fundamentals: Euro finance ministers to access Greece's progress
Finance ministers of the Euro zone countries will hold a scheduled meeting in Luxembourg on September 12. The main topic of discussion will be Greece and Cyprus, namely the economic recovery of these two countries. In the meantime, on Friday both German and Spanish inflation statistics for August is due. In addition, several important indicators including the producer price index, consumer sentiment and budget balance are going to be published in the US today.
EUR/USD poised for gains this week
EUR/USD has been rising for a fifth consecutive day in the morning on Friday, after the currency pair posted substantial gains on Thursday. The monthly pivot point was eroded by bulls in the past 24 hours, and recent highs/weekly R1/23.6% Fibo resistances are being tested at the moment. Weekly technical indicators are giving signals to acquire the Euro next week and we tend to support them. In case the 1.13 mark is violated, we will look at the next major supply at 1.1435 (Jun high), which guards the May high at 1.1437.Daily chart
Following days of gains for the shared European currency, it breached the upper trend-line of the channel up pattern in the one-hour chart. This fact adds to our bullish expectations with respect to EUR/USD. However, at first we should see a confident confirmation of the 1.13 round level, also the Fibonacci retracement and Sep 2 high.
Hourly chart
SWFX sentiment neutral, while pending orders surge
Meanwhile, the share of bullish positions at OANDA amounts to 43% at the moment, while SAXO Bank market participants are even more pessimistic with respect to the common currency, as their portion of the longs takes up only 36% of all open trades in the morning on Friday.
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."