- SWFX market sentiment is 53% bearish
- Pending commands in the 100-pip range 52% short
- Pair opened Friday's session at the 1.1103 level
- Aggregate daily technical indicators bet EUR/USD will depreciate
- Economic events to watch over the next 24 hours: Spanish PMI Manufacturing (June); Italian PMI Manufacturing (June); French PMI Manufacturing (June); German PMI Manufacturing (June); EU PMI Manufacturing (June); EU Unemployment Rate (June); US PMI Manufacturing (June); US ISM Manufacturing (June); Fed's Mester Speaks;
The number of Americans filing for unemployment benefits rose last week, but remained below a level associated with a healthy labour market. Jobless claims increased by 10,000 to 268,000 in the week ended June 25, a report from the Labour Department showed. Economists had expected jobless claims to edge up to 266,000 from the 259,000 originally reported for the previous week. Continuing claims decreased for the third week in the last four. Meanwhile, the Labour Department reported the less volatile four-week moving average came in at 266,760, unchanged from the previous week's revised average of 266,750. The report also showed that a reading on the number of people receiving ongoing unemployment assistance fell by 20,000 to 2.120 million in the week ended June 18th, which is lower than the 2.15 million print penciled in by forecasters. Economists suggest this is a sign that the poor pace of jobs growth in April and May, which prevented the Federal Reserve from raising rates this month, was likely an aberration. It is unlikely for the labour market to slow down abruptly without a corresponding increase in layoffs, their reasoning goes. The next monthly employment report is scheduled for July 8.
The US economy expanded more than previously estimated during the first three months of the year, but not as sharply as previously estimated, moreover, the overall trend remains vulnerable to a new round of global economic turmoil. According to the Commerce Department, gross domestic product, the most important measure of goods and services produced across the US, advanced 1.1% at an annual pace in the first quarter, showing the weakest pace in a year. Also, the agency previously forecasted the economy rose at a 0.8% pace. The following announcement confirms that the economy has regained momentum in the second quarter. Nevertheless, uncertainty following last Thursday's "Brexit" referendum poses a risk to the growth outlook. In the meantime, the US consumers became more confident in the economy in June since the Conference Board release showed the index went up to 98 from 92.4 in May. Moreover, Americans outlook of current economic conditions was the most positive since September. However, despite the following jump in June's readings, consumers are still relatively cautious about economic growth in the short term.
Upcoming fundamentals: European and US PMI Manufacturing data
With the start of a new month countries release their manufacturing purchasing manager's index for the previous month. The list of countries, which will release it, is big, however it is clear that the flow will start at 7:15 GMT and continue to 8:30 in the European Union. The most important from the EU PMIs will be the German Manufacturing PMI at 7:55 GMT. In addition, the EU will release the common union unemployment rate at 9:00 GMT. From the other side of the Atlantic, in the US the PMI Manufacturing will be published at 13:45 GMT, and it will be followed by the ISM Manufacturing fifteen minutes later at 14:00 GMT. Last but not least, the Fed's Mester is set to give a speech at 15:00 GMT.
EUR/USD fluctuating around 1.11 mark on Friday
Daily chart: The European common currency experienced a three day rally against the Greenback after the Brexit vote results. However, during Thursday's trading session the pair declined slightly from 1.1124 to 1.1105 at the end of the day's session, after it was highly volatile during the time. On Friday morning, the Euro continued to depreciate against the Buck, as the currency exchange rate moved to 1.1097 by 5:00 GMT. This level is located exactly at the support provided by the 200- day SMA.Daily chart
Hourly chart: The hourly chart shows that the Euro climbed against the US Dollar on Wednesday, until it reached the resistance put up by the weekly pivot point at 1.1144. The currency exchange rate bounced off the resistance to the 20-hour SMA at 1.1110, against which it struggled for three hours. After the struggle with the 20-hour SMA, the pair dropped through a cluster of support to the level of 1.1034. Since then, the EUR/USD pair moved up through the same cluster, which now posed a resistance.
Hourly chart
SWFX trader sentiment stays unchanged
OANDA trader bearish sentiment has increased compared to Thursday's 59.45%, as, at the moment, 61.35% of OANDA open positions are short. In addition, SAXO Bank clients have decreased their bearish stance, as their open short positions are now at 61.44% compared to 63.49% on Tuesday.