- Market sentiment remains neutral on Tuesday
- 100-pip pending orders are also divided equally between bulls and bears
- 55-day SMA crossed 200-day SMA to the upside, sentiment improves
- Daily technical indicators still project losses for the Euro
- Economic events to watch in the next 24 hours: German Factory Orders (Aug); Eurogroup and ECOFIN Meetings, US Trade Balance (Aug); FOMC Member Williams Speaks; ECB President Draghi Speaks
Activity in the services sector of the Euro area's economy kept the healthy pace of expansion, the final readings from the Markit survey revealed. The pan-Euro zone's Purchasing Managers' Index was revised slightly downwards to 53.7 points last month, down from 54.4 in August. Economists suggested the pace of activity's growth would slow down to 54 points. In addition to that, the composite PMI, which tracks both manufacturing and services sectors, came in at 53.6 points in September, also down slightly from August's 54.3 points. Markit analysts continued assuming the currency bloc's economy is on track of posting a 0.4% growth in the third quarter of this year. By country, only the French PMI was revised upwards to 51.9 points, while other major Euro zone economies including Germany, Italy and Spain showed a moderate decline.
In the meantime, the Eurogroup began its two-day meeting in Brussels. Finance ministers from all countries of the Euro zone are gathering together, in order to discuss the Greek bailout progress and implementation of reforms in the country. Moreover, officials are going to prepare for annual budgetary surveillance programme, where the Euro group is set to put pressure on governments to bring down budget shortfalls.
Upcoming fundamentals: Draghi to speak on Tuesday, QE comments expected
President of the European Central Bank Mario Draghi will speak in Frankfurt at 17:00 GMT on Tuesday. Markets expect from him to respond to weakness in China and deteriorating inflation and growth outlook in Europe. It is possible that Draghi will mention the QE programme in the Euro zone and will therefore add to volatility of the Euro today. Additionally, the San Francisco Fed President John Williams will talk in San Francisco on Oct 6, and audience questions are expected. He is the FOMC voting member in 2015.
EUR/USD still unable to violate 1.1260
There have been four attempts to breach the 1.1260 mark (50% retracement) since Sep 24. However, all of them turned to be unsuccessful so far. Despite this fact, a decline of the Euro is also unlikely due to a dense cluster of nearby supports at 1.1160/22. Meanwhile, 55-day SMA has finally crossed the 200-day SMA, which implies a major swing in sentiment among market participants to the positive side. However, unless 1.1260 or 1.1122 levels are penetrated, the neutral outlook will remain largely intact with respect to EUR/USD.Daily chart
In the one-hour chart, the EUR/USD currency pair slipped below the 200-hour SMA yesterday, underlying a failure to consolidate above this important technical level. However, this event does not automatically imply a change of the outlook, which stays mixed about the pair's nearest future.
Hourly chart
SWFX sentiment and pending orders are neutral
Meanwhile, bullish open positions at OANDA advanced further to 48.19%. SAXO Bank traders are, however, remaining largely pessimistic with respect to the common currency as their portion of the longs stays at just 36% today.