- SWFX market sentiment is 64% bearish
- Trader set up pending orders are 53% short
- Pair opened Tuesday's session at the 1.1161 level
- Aggregate daily technical indicators bet EUR/USD will surge
- Economic events to watch over the next 24 hours: US PCE Price Index (June); US Personal Income (June); Spanish PMI Service (July); Italian PMI Service (July); French PMI Service (July); German PMI Service (July); EU PMI Service (July); EU PMI Composite (July); German PMI Composite (July); French PMI Composite (July);
US manufacturing activity contracted in July after Britain's decision to leave the European Union, official data from the Institute for Supply Management (ISM) revealed on Monday. The ISM announced that its Purchasing Managers' Index (PMI) came in at 52.6 points in the seventh month of the year, compared to last month's 53.2, its highest one-year result, whereas market analysts anticipated a slight decrease to 53.1 in the reported month. Nevertheless, the Index remained above the 50 level, which indicates expansion in manufacturing. The Index is based on data collected from about 400 manufacturing firms across the United States. Other data released on Monday showed the US manufacturing sector remained in the expansionary region, as the seasonally adjusted Markit final Manufacturing PMI for the United States equals 52.9 points in the same month, following last month's 51.3 mark and hitting its highest level since October 2015, when it climbed to 54.1 points. The July flash PMI posted 52.9, while economic desks expected the preliminary reading to come in at 51.5 points.
The Consumer Price Index in the Euro zone's largest economy, Germany, continued to rise in July, the third consecutive month of growth, the Federal Statistics Office revealed on Thursday, but remained comfortably below the target level. The flash estimate from Destatis showed that consumer prices in Europe's economic powerhouse increased 0.3% month-over-month on a non-seasonally adjusted basis in July, after rising 0.1% in the previous month, while market analysts penciled in an acceleration to 0.2% in the seventh month of the year. On annual basis, the CPI climbed 0.4% in the same month, up from last month's final reading of 0.3%. In the meantime, the German Unemployment Change report published by the German Statistics Office on Thursday revealed that the unemployment rate in the country remained at 6.1% in July, whereas the number of unemployed people in the Euro zone's number one economy dropped by 7,000 in the reported month, compared to a fall of 6,000 registered in the preceding month, while economic desks anticipated a decline of 3,000 in July. The jobless rate in Germany stayed at the lowest level in the last 20 years. The European Central Bank aims to maintain inflation rates of below, but close to, 2% over the medium term.
Upcoming fundamentals: EU PMI Services and US PCE Price Index
The first half of the next twenty four hours will be most likely quiet, as there are minor data releases from the US. At 12:30 GMT PCE Price Index for June on a month-to-month and annual basis will be released. At the same time US Personal Income and Spending monthly changes for June will be published, and both of them are forecasted to be at 0.3%. However, on the early morning on Wednesday the Markit will publish their PMI Services and PMI Composite indices for the EU countries for July. First will be the Spanish and Italian PMI Services at respectively 7:15 GMT and 7:45 GMT. Afterwards French and German PMI Composite and Services indices will be published at 7:50 and 7:55 GMT, and, as it is common after such releases, the common data for the whole of the EU will be compiled and published at 8:00 GMT.
EUR/USD approaching 1.12 mark on Tuesday
Daily chart: The common European currency slightly depreciated against the US Dollar, as the currency exchange rate moved fell from 1.1173 at the start of day's trading to end trading at 1.1160. On Tuesday morning the pair has regained those losses and even surged above the previous open, as the rate was at 1.1178 by 5:00 GMT. The Euro faces no resistance in its surge against the Greenback until the level of 1.1236, where the 100-day SMA is located. However, the upper Bollinger band at 1.1206 might hinder the pairs gaining momentum.Daily chart
Hourly chart: The hourly chart of the EUR/USD currency exchange rate shows a fluctuation for the past 24 hours, as the rate kept moving up and down in a ten pip range between the upper Bollinger band at 1.1175 and 20-hour SMA at 1.1165. However, in the few hours up to 5:30 GMT on Tuesday the pair had slightly moved upward, as the upper Bollinger band was bent upwards to 1.1180.
Hourly chart
SWFX bearish sentiment increases on Tuesday
OANDA trader bearish sentiment has slightly decreased compared to Monday's 63.77%, as, at the moment, 62.58% of OANDA open positions are short. In addition, SAXO Bank clients have also slightly decreased their bearish stance, as their open short positions are now at 67.51% compared to 68.39% of last trading session.