- SWFX market sentiment is 56% bearish
- Trader set up pending orders are 51% short
- Pair opened Tuesday's session at the 1.1088 level
- Aggregate daily technical indicators bet EUR/USD will surge
- Economic events to watch over the next 24 hours: US Unit Labor Costs (Q2); US Wholesale Inventories (June)
The US non-farm sector created more jobs than expected last month, whereas the unemployment rate remained unchanged, fresh data from the Department of Labor showed on Friday. According to the Bureau of Labor Statistics, the US non-farm payrolls (NFP) increased by 255,000 in July, while market analysts expected the sector to add just 181,000 jobs in the reported period. Meanwhile, the preceding month's figure was revised up to 292,000 from the originally reported reading of 287,000. Furthermore, the headline jobless rate came in at 4.9% in July, in line with last month's figure, whereas economic desks pencilled in a slight deceleration to 4.8%. The report also revealed that average hourly earnings rose 0.3% month-over-month on a seasonally adjusted basis in July, following the 0.1% increase registered in June, while economists anticipated the indicator to come in at 0.2% in the reported month. On a year-over-year basis, average hourly earnings remained steady at 2.6%, meeting analysts' projections. The NFP report provides important insights into the health of the US economy and offers some clues to the path of future rate hikes. Back in 2012, the Federal Reserve set an unemployment target of 6.5%.
The number of Americans filing for unemployment benefits increased to 269,000 in the week ended July 30, compared to the preceding week's reading of 266,000, whereas market analysts pencilled in a slight drop to 265,000 in the reported period, fresh figures from the Department of Labour showed on Wednesday. The 269,000 initial jobless claims figure reported last week marked 74 consecutive weeks of claims under the 300,000 level, the longest streak since 1973. The data also showed that the four-week moving average of claims, considered a better measure of labour market trends, grew 3,750 to 260,250 in the reported week. A Labour Department analyst highlighted that there were no special factors influencing last week's claims data. In the meantime, the number of continuous jobless claims fell 6,000 to 2.14 million in the week ended July 23, while the four-week moving average jumped 5,250 to 2.14 million. Last week's claims report has no impact on the NFP data for July, set for release on Friday. Economic desks forecast nonfarm payrolls to show growth of 180,000 for the seventh month of the year, following June's hike of 287,000.
Upcoming fundamentals: US Unit Labor Costs and Wholesale Inventories
Data affecting the EUR/USD pair on Tuesday will be coming from across the Atlantic, as two different, but still interconnected, statistics releases will happen in the US. First will be the US Unit Labor Costs for the second quarter of this year, and they will be released at 12:30 GMT. The unit labor costs are forecasted by experts to have grown by 1.7% in the last quarter. Second will be the US Wholesale Inventories for June at 14:00 GMT. The wholesale stockpiles are expected to have grown by 0.1% in June.
EUR/USD rebounds on Tuesday
Daily chart: The common European currency slightly surged on Monday, as it moved to the 1.1088 level after bouncing off the 200-day SMA at 1.1078. On Tuesday morning, the currency exchange rate moved lower and reached below the 200-day simple moving average. However, this is the third time that the pair has rebounded against the support of the SMA, and, as the daily aggregate technical indicators forecast a surge for the pair, it is most likely that the exchange rate will surge during Tuesday's trading session.Daily chart
Hourly chart: The hourly chart shows that the Euro gradually depreciated against the US Dollar on Monday, as it step by step moved lower from 1.1104 at 5:00 GMT to 1.1074 by 13:00 GMT. Afterwards, the currency exchange rate found support in the lower Bollinger band and moved up to the 20-hour SMA at 1.1086 by 20:00 GMT. The currency pair bounced off the SMA and reached once more the lower Bollinger band at 1.1075. At the moment, the EUR/USD pair is fluctuating between the two before mentioned levels, as the volatility of the pair decreases.
Hourly chart
SWFX traders bearish on Tuesday
OANDA trader bearish sentiment has almost remained unchanged compared to Monday's 57.96%, as, at the moment, 57.00% of OANDA open positions are short. In the meantime, SAXO Bank clients have decreased their bearish stance, as their open short positions are now at 62.29% compared to 63.45% of last trading session.