- SWFX market sentiment is 52% bullish
- Pending commands in the 100-pip range 63% short
- Pair opened Wednesday's session at the 1.1010 level
- Aggregate daily technical indicators bet EUR/USD will depreciate
- Economic events to watch over the next 24 hours: ECB Monetary Policy Meeting Accounts; US ADP Employment Change (June); US Initial Jobless Claims (July 2)
Factory orders in Germany posted no improvement in May when measured on a monthly seasonally adjusted basis. According to the latest report from the German statistical office Destatis, factory orders in the Euro zone's largest economy kept unchanged in the fifth month of 2016, when they fell a revised 1.9%. Economists had predicted a 1% rise in the data, which is typically volatile. On a yearly basis, the gauge decreased by 0.2% in the reported month, after posting a 0.4% decline in the previous month, measured on a nonseasonally adjusted basis. Markets had projected growth of 0.9% year-on-year in May. Meanwhile, according to the report, domestic orders decreased by 1.9%, while foreign orders increased by 1.4% on the previous month. New orders from the euro area were up 4.0% on the previous month, while new orders from other countries decreased by 0.3% compared to April 2016. There are growing signs that, after a good start to the year, Germany's economy will at best have achieved only modest growth in the second quarter. The sideways trend in manufacturing points to it too, making only slight advances in the coming quarters. Moreover, the British vote in June, in which the nation opted to quit the EU, could further weaken the German economy.
An important indicator of the euro area's economic health stayed unchanged in June. The 19-country Markit Composite PMI, a forward-looking indicator tracking development in the euro area's manufacturing and services sectors, was unchanged at 53.1 points during the sixth month of the year, same as in May, when it rebounded from a 15-month trough. Meanwhile, conditions in the euro-zone services sector eased as the gauge tracking development in the area booked 52.8 points, down from 53.3 snatched in May. A level below 50.0 signals a deterioration from the previous month, while above 50.0 signals an increase. Among major euro area countries, France was once again the weakest performer, with PMIs pointing to a contraction in economic output. Indicators for Germany, Italy and Spain pointed to solid expansion. Data overall signaled a continued pick-up in employment, with job growth accelerating to a five-year high. Meanwhile, a separate report from Eurostat showed that retail sales in the euro zone came in the green both on the monthly and annual basis in May, after the flat reading seen a month before. Retail sales rose by 0.4% in May, after a 0.2% increase in April. This brought the annual rate of increase up from 1.4% to 1.6% in May.
Upcoming fundamentals: ECB Monetary Policy Meeting Accounts and US employment data
EUR/USD pair on Thursday is set to be affected by two major factors from both sides of the Atlantic Ocean. First of all the accounts of the ECB monetary policy meeting will be released at 11:30 GMT. However, a bigger impact on the currency might have US employment data later in the day, as ADP Employment Change and the US Initial Jobless Claims are set to be released one after another respectively at 12:15 and 12:30 GMT. US Initial Jobless Claims data had a staggering effect at the start of June, when the number came a lot lower than expected by any analyst.
EUR/USD unchanged on Thursday
Daily chart: The common European currency remains unchanged against the US Dollar on Thursday, as it was at 1.1099 by 5:00 GMT. The currency exchange rate fell on Tuesday, and it recouped some of its losses on Wednesday. As the pair surged on Wednesday, it went past the resistance provided by the 200-day SMA and weekly PP at 1.1092. In the meantime, daily aggregate technical indicators forecast that the EUR/USD pair will trade lower by the end of the day's trading.Daily chart
Hourly chart: The hourly chart shows, that the Euro against the US Dollar on Wednesday was highly volatile midday, however, afterwards the currency exchange rate surged steadily until 20:00 GMT, and it went past the resistance made up of weekly PP and 200-hour SMA around 1.1090. In the late evening, the pair suffered minor losses, and it fell below the weekly PP and 200-hour SMA for a moment early morning on Wednesday. However, by 7:00 GMT the rate is back at the level, where it started the day.
Hourly chart
SWFX traders remain bullish on Thursday
OANDA trader bearish sentiment has increased compared to Wednesday's 59.39%, as, at the moment, 62.08% of OANDA open positions are short. In addition, SAXO Bank clients have increased their bearish stance, as their open short positions are now at 59.39% compared to 54.91% of last trading session.