- Share of long pending orders in 100-pip range returned back to 49%
- Market sentiment is slightly bearish (52%) at the moment
- After crossing 1.1295, bulls to aim at Jun high (1.1437)
- Demand zone below 1.13 to support the pair this week
- Economic events to watch in the next 24 hours: Italian CPI (Aug); Euro zone Industrial Production (Jul)
The bunch of data from the Euroland showed that consumer prices in Germany saw their growth rate unchanged in August, while industrial production in Italy strengthened in July. In Germany, the CPI measure remained flat on a monthly basis in August, following the 0.2% growth in July. Concerning the most important product categories, energy prices fell 7.6% on an annual basis, while food and rent edged up 0.8% and 1.1% respectively. Another report by the Destatis revealed that prices in wholesale trade in Germany decreased by 0.8% in August from the preceding month and versus an anticipated growth of 0.2%.
Meanwhile, industrial output in Italy expanded on a monthly basis in July after the previous drop into negative territory. According to the Istat, the production gauge advanced 1.1%, compared with the decline by 1% in June, beating the estimates of 0.9% increase. The gain was led by a 7.1% monthly increase in energy output, while consumer goods added 1.0% and intermediate goods rose 0.6% over the period. After the several upbeat releases of economic data from Italy, the government of Italian premier Matteo Renzi announced that it expects economic growth of 0.7% this year after three consecutive years of contraction.
Upcoming fundamentals: Euro area's manufacturing projected to grow in July
Industrial production data for the Euro zone is due today at 9:00 GMT. At the moment markets are expecting a monthly rebound of 0.2% in July, while on an annual basis the production has probably weakened its pace from growth down to 0.6%. Meanwhile, Italy's inflation will be released at 8:00 GMT on Monday, before the pan-European CPI is announced later this week on Wednesday.
EUR/USD to trade range bound between 1.13 and 1.143
EUR/USD erased one additional resistance on Friday, by penetrating the 23.6% Fibonacci retracement of the 2014-15 downtrend. Therefore, the pair was increasing in value every day during last week. However, it is highly likely that the cross will trade sideways until Thursday, when the Fed is due to make a rate decision. Moreover, both bulls and bears are estimated to feel pressure from the upside (1.1430 area) and downside (below 1.13), respectively. Meanwhile, daily technical indicators are now assuming the Euro is overbought and it should be sold versus the US Dollar soon.Daily chart
In the one-hour chart, EUR/USD is now trading significantly above any of the nearest supports including the Fibonacci retracement and 200-hour SMA. The latter is only starting to reverse a trend back to the upside, underlying that there are still plenty of bullish opportunities to send the price even higher in the short-term.
Hourly chart
SWFX sentiment and pending orders are losing ground
Meanwhile, the share of bullish positions at OANDA amounts to 42.27% 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 33% of all open trades on Monday.