- SWFX market sentiment is 53% bearish
- Pending commands in the 100-pip range 52% long
- Pair opened Thursday's session at the 1.1058 level
- Aggregate daily technical indicators bet EUR/USD will remain unchanged
- Economic events to watch over the next 24 hours: Spain's Unemployment Rate (Q2); German Unemployment Rate (July); EU Economic Confidence (July); German CPI (July); German HICP (July); US Initial Jobless Claims (July 23); US International Trade in Goods (June)
The Euro zone money supply and credit to the private sector grew at a faster pace in June than the month before, according to official data released by the European Central Bank (ECB) on Wednesday. The ECB reported that its broad indicator of money supply M3 advanced 5.0% on an annual basis in June. That was in line with analysts' expectations following the previous month's reading of 4.9%. The central bank regards M3 money supply as a barometer for future inflation. The data also revealed that the narrower monetary aggregate M1 grew 8.6% year-over-year in the sixth month of the year, down from the 9.1% growth pace seen in May. Furthermore, the annual growth rate of loans to the private sector climbed 1.5% in June, compared to last month's pace of 1.3%. Loans to households in the Euro zone went up by 1.7% year-over-year, or 0.1% up month-over-month in June, matching analysts' estimates. In the meantime, loans to non-financial corporations in the 19-nation currency bloc increased 1.7% in the reported month, after rising 1.6% in the preceding month. The following data release added evidence that the European Central Bank's credit easing policy, which was launched two years ago, is working. Moreover, the data confirmed the view of a continued improvement in credit conditions, stated in the latest ECB quarterly bank lending survey
For the second consecutive month, orders for long lasting factory goods made in the United States fell, fresh figures from the US Census Bureau revealed on Wednesday. Excluding transportation equipment, new orders for durable goods fell 0.5% on a seasonally adjusted basis in June, compared to the previous month's downwardly revised drop of 0.4%, whereas market analysts expected core durable goods orders to advance 0.3% in the reported month. Overall orders for US manufactured durable goods decreased 4.0% in June, following last month's revised fall of 2.3% and falling behind the 1.1% drop forecast. Other data released by the Energy Information Association on Wednesday showed that US crude oil inventories added 1.7 million barrels in the week ended July 22, after the 2.3 million barrel fall registered in the previous seven days, while economic desks penciled in a decrease of 2.1 million barrels in the reported period. The durable orders report stands in contrast to other recent data suggesting the US manufacturing sector stabilized in June. A Federal Reserve report showed manufacturing output was modestly above year-earlier levels in June.
Upcoming fundamentals: Unemployment, CPI, confidence and international trade on Thursday
With the upcoming end of the month, various data is being released on Thursday on both sides of the Atlantic Ocean. First of all the Spanish unemployment rate for the second quarter of this year will be released at 7:00 GMT. Afterwards, the German unemployment rate for July will be published at 7:55 GMT. At 9:00 GMT the EU economic confidence index for July will be out, and the last thing affecting the EUR/USD pair from the Euro strength perspective will be the German CPI and HICP for July at 12:00 GMT. Both of these data releases will be published on a month-to-month and annual basis. Fundamental data affecting the US Dollar from the US on Thursday is made up from the Initial Jobless Claims for the week of July 23 and the International Trade in Goods for June. Both of these numbers will be out at 12:30 GMT.
EUR/USD surges past 1.1050 on Wednesday
Daily chart: The common European currency scored major gains against the US Dollar, as the currency exchange rate started Wednesday's trading at 1.0987 and ended the trading session at 1.1058. During this surge, the currency pair broke through two resistance levels, as first the weekly pivot point at 1.1005 gave up, and afterwards the first weekly resistance at 1.1055 was broken. However, the weekly R1 is also a part of a larger resistance cluster, which is also made up of the 20-day SMA at 1.1063 and 200-day SMA at 1.1073, and these resistances were holding the pair back on Thursday morning.Daily chart
Hourly chart: The hourly chart shows that the common European currency was flat during Wednesday until 18:00 GMT. It has to be noted, that it was exceptionally flat, as the Bollinger bands were only in a distance of 10 pips during the whole day until 18:00 GMT. As the FED announced no rate change at 14:00 GMT, nothing happened, as the market reacted mildly to this decision. However, as the rate started to slowly surge, pending commands kicked in and created a chain event, which made the currency exchange rate jump in the next two hours from 1.0996 to 1.1059. Since then, the pair has resumed trading flat at a higher level than previously.
Hourly chart
SWFX bearish sentiment increases
OANDA trader bearish sentiment has increased compared to Wednesday's 52.25%, as, at the moment, 55.13% of OANDA open positions are short. In addition, SAXO Bank clients have slightly increased their bearish stance, as their open short positions are now at 58.58% compared to 54.27% of last trading session.