- Market sentiment is completely neutral on Monday morning
- Bullish pending orders increased their share to 43%
- The longs are aiming at 1.1260, followed by Friday high at 1.1318
- Daily technical indicators project losses for the Euro, weekly studies foresee a rebound
- Economic events to watch in the next 24 hours: Spanish, Italian, French, German and Euro zone Services PMI (Sep); Euro zone Retail Sales (Aug); US Services PMI (Sep), Labour Market Conditions Index (Sep) and ISM Non-Manufacturing PMI (Sep)
The number of registered unemployed in Spain advanced again in September, following the first rise in seven months in August. According to the latest Employment Ministry figures, the number of jobless Spaniards increased by 26,100 during the reported period, after a rise of 21,700 in the preceding month. At the same time, market consensus bet that 21,700 unemployed workers would be added to the official count in September. All of the growth in number of unemployed people came from the service sector, where 43,155 workers officially lost their jobs. Meanwhile, the jobless rate in Spain remains at 22%, despite the fall in unemployment numbers seen overall this year, and it continues to be the second highest one in the European Union, giving up the negative lead only to Greece.
In the meantime, the ECB President Mario Draghi in his speech at the Atlantic Council's Global Citizen Award said that economic growth is returning to Europe, after the region failed to make a major contribution to the global expansion in the past seven or eight years. Draghi also added that the further Euro integration is necessary to extract all the economies of scale and scope that the union brings.
Upcoming fundamentals: Euro area's services industry to remain upbeat in September
Final services PMIs are due today in the majority of European countries. The first country to release data will be Spain (7:15 GMT), followed by Italy, France and Germany. The pan-European PMI for the industry will be announced at 8:00 GMT. All of them are expected to stay above 50 points, the threshold which divides expansion from contraction of activity. Additionally, Euro zone's retail sales (9:00 GMT) have probably fallen down by 0.1% in August after a 0.4% gain in the previous month.
EUR/USD fails to consolidate at 1.13 after NFP
EUR/USD's rally on Friday was halted by the 1.13 level, which turned to be a very significant resistance for the cross. Therefore, the common currency bounced back toward 1.12 by the end of weekly trading, despite weak US non-farm payrolls. Nonetheless, the Dollar's overall weakness means the Euro is still poised for gains in the nearest future. At least a rise above the 50% Fibonacci retracement of the Jul-Aug uptrend is needed to change our outlook from neutral to positive. Extra support will be offered by the bunch of moving averages at 1.1162/39.Daily chart
Bullish scenario is shared by the EUR/USD's one-hour chart. The Friday's bounce back was not strong enough to push the Euro below the 200-hour SMA, currently at 1.1197. Therefore, we see the pair being actively supported in the short term, while initial bullish target is placed at 1.1261, followed by the 1.13-1.1320 area.
Hourly chart
SWFX sentiment neutral, bullish orders still in minority
Meanwhile, bullish open positions at OANDA rose moderately to 46.17% by Monday morning. SAXO Bank traders are also remaining largely pessimistic with respect to the common currency as their portion of the longs stays at just 34% today.