- Bullish market share rose from 52% to 53% in the past 24 hours
- Broad range (100-pip) pending orders are set to sell the Euro in just 51% of all cases
- EU GDP data and US retail sales to become major market drivers on Friday
- Daily technical indicators assume the Euro will lose value, weekly ones are mixed
- Economic events to watch in the next 24 hours: French, Italian and German GDP (Q3); Spanish CPI (Oct); Italian CPI (Oct); Euro zone GDP (Q3) and Trade Balance (Sep); US Retail Sales (Oct), PPI (Oct) and Reuters/Michigan Consumer Sentiment Index (Nov)
© Dukascopy Bank SA
The 19-nation bloc's industrial production demonstrated a contraction in September, even though output from manufacturers, mines and utilities improved in general, the European Union's data office Eurostat showed. The Euro area's output slipped 0.3% on a monthly basis in September, while economists had projected a decline of 0.1% month-on-month. In August production fell 0.4%, whereas in July it rose 0.7%. Measured on an annual basis, industrial production across the Euro zone jumped up 1.7% in September, after an increase of 2.2% in August. The figure was not in line with analysts' expectations of a 1.3% gain. The biggest drop was recorded in the production of durable consumer goods, which fell 3.9% on month. Output of non-durable consumer goods, like for instance food or toiletries, also dipped by 1%, the first time since July.
Meanwhile, European Central Bank President Mario Draghi stated at the Committee on Economic and Monetary Affairs on Thursday that ECB policymakers would consider a revision of the monetary policy in the Euro zone at their next meeting in December. The head of the ECB's rather cautious remarks in regards to inflation resulted in a weaker trade for the Euro against the US Dollar and the British Pound.
Watch More: Dukascopy TV
Upcoming fundamentals: EU GDP data and US retail sales
By the time this report is published, almost all major countries of the Euro zone will already release their data on economic growth in the third quarter. Both Germany and France, two biggest economies of the monetary bloc, are estimated to grow 0.3% quarter-on-quarter. Gross domestic product of the whole Euro area is estimated to rise by 0.4% from the second quarter and by 1.7% on an annual basis. Meanwhile, analysts forecast a healthy growth for US retail sales that are going to be published later in the day at 13:30 GMT. The headline reading is likely to show an increase of 0.3%, with core sales picking up by 0.4% on a monthly basis in October.
Read More: Fundamental Analysis
EUR/USD at weekly high after ECB comments
EUR/USD jumped above July low at 1.0808 on Thursday, following moderately hawkish comments from ECB Executive Board member Benoit Coeure. Additionally, daily trading volume surged to the highest level since Oct 23. Now we expect a bounce back off this currency pair as bears are preparing for EU GDP and US retail sales data later on Friday. Positive US numbers may push EUR/USD towards recent lows at 1.07, while encouraging Euro zone numbers should keep the pair uplifted above 1.08.Daily chart
© Dukascopy Bank SA
EUR/USD was clearly stopped by 200-hour SMA, currently at 1.0820. This line has already been weighing on the pair for a long period of time. Any spike above it on Friday will reopen the 1.0930 mark for bulls. Nonetheless, we tend to preserve bearish views with respect to mid-term perspectives of this cross.
Hourly chart
© Dukascopy Bank SA
Read More: Technical Analysis
Bulls advance to 53%, orders edge closer to 50/50
Meantime, sentiment among OANDA clients is completely neutral in the morning on Friday. At the same time, SAXO Bank traders are unwilling to go long on EUR/USD, while bears are holding 58% of all positions at the moment (60% on Thursday).
Spreads (avg,pip) / Trading volume / Volatility
Vast majority of Community members forecast the Euro to plummet against the US Dollar this week
© Dukascopy Bank SA
This week, Dukascopy traders became totally bearish on the European currency's perspectives, as only 12.5% of all votes are set to go long on the EUR/USD currency pair at the moment.
Read More: Community Forecasts
"The price was declining sharply after the NFP release and daily candle closed under the 1.0850 support level. I am expecting a pullback near this area and there is a high possibility of a bearish reversal (the bearish pressure will continue). In my view this pair will be very close to parity at the end of the year" - said trader csan86.
Average forecast says EUR/USD will trade at 1.12 by February
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Oct 13 and Nov 13 expect, on average, to see the currency pair around 1.12 by the end of February 2016. Though the majority of participants, namely 57% of them, believe the exchange rate will be generally below this level in ninety days, with 35% alone seeing it below 1.08. Alongside, only 19% of those surveyed reckon the price will trade in the range between 1.12 and 1.18 by the end of February. © Dukascopy Bank SA