- SWFX market sentiment is 59% bearish
- Trader set up pending orders are 55% short
- Pair opened Tuesday's session at the 1.1182 level
- Aggregate daily technical indicators bet EUR/USD will surge
- Economic events to watch over the next 24 hours: German ZEW Survey (August); US CPI (July); US Housing Starts (July); US Building Permits (July); EU Consolidated Financial Statement of the Eurosystem; US Capacity Utilization (July); US Industrial Production (July)
Sales at US retailers unexpectedly fell in July, official data revealed on Friday. According to the Department of Commerce, retail sales came at a seasonally adjusted 0.0% in the reported month, compared to the previous month's upwardly revised figure of 0.8%, while economic desks pencilled in a deceleration to 0.4%. Furthermore, core retail sales, excluding automobiles, dropped a seasonally adjusted 0.3% in the seventh month of the year, whereas the preceding month's gain was revised up to 0.9% from the originally reported increase of 0.7%, whereas analysts expected a decrease to 0.2%. Separate reported released by the Department of Labor on the same day showed that US producer prices returned to contraction in July after three months of consecutive growth, as the Producer Price Index dropped 0.2% on an annual basis in the reported month, following the 0.3% rise registered in July. Monthover-month, US factory gate inflation declined 0.4% in July, compared to the 0.5% gain seen in the preceding month, while market analysts anticipated a fall to 0.1% in the reported period. Meanwhile, the University of Michigan Consumer Sentiment survey released on Friday showed that mood among US shoppers improved in August, as it preliminary Consumer Confidence Index rose to 90.4, compared to July's final print of 90.0, while markets predicted the Index to come in at 91.5 in the reported period.
Manufacturing activity in the Empire State region reflected contraction in the eight month of the year, official data showed on Monday. The Empire State Manufacturing Survey, the New York Federal Reserve's gauge of activity in the region, came in at -4.2 points in August, compared to the 0.6 hike seen in the previous month, whereas market analysts pencilled in an acceleration to 2.1 during the reported period. After entering positive territory for the first time after eight months in March, the survey's index swung between positive and negative. The survey drove the US Dollar lower against most of the major currencies as well as added to concerns about the state of the US economy, following last week's surpassingly weak economic data. Nevertheless, manufacturers expressed optimism about the US economy over the long-term. The reading is compiled from a survey of about 200 top manufacturing executives in New York State. The questionnaire seeks their opinion on the change in a number of business indicators from the previous month, and also the likely direction of these indicators six months into the future. A number below 0.0 points indicates contraction in the Empire State manufacturing region, while a number above indicates improving conditions.
Upcoming fundamentals: Loads of data from both sides
Tuesday is a busy day on both sides of the Atlantic, as fundamental data will be released both in the US and the EU. First of all at 9:00 GMT the German ZEW Survey for August will be released, and it will shed some light on the economic sentiment and the current situation. At 12:30 GMT data from the US will start pouring in, as CPI data, Housing Starts and Building Permits data for July will be released at that time. All of the data will be available as a month-to-month change on a percentage basis with some tweaks for each of them. For example the construction indicators will be also available in real numbers. In the meantime, the CPI will be also available on an annual basis and also excluding food and energy. Afterwards the EU Consolidated Financial Statement of the Eurosystem will be released at 13:00 GMT, and fifteen minutes later, at 13:15 GMT, US Capacity Utilization and Industrial Production data for July will be released.
EUR/USD surges to 1.12 mark on Tuesday
Daily chart: The common European currency continues to appreciate against the Greenback, as the rate has been flirting with the 1.12 mark for the past sessions. By 5:00 GMT on Tuesday the currency pair was at 1.1197, and it was set to surge to at least the level of 1.1230, where the 100-day SMA and weekly R1 provide a combined resistance. Previously, the currency exchange rate almost touched the before mentioned resistance level, as the Euro reached above the 1.1220 level on Friday. In addition, daily aggregate technical indicators support a surge of the pair during today's trading session.Daily chart
Hourly chart: The hourly chart shows, that the Euro was appreciating steadily against the US Dollar with only two exceptions. The currency exchange rate was hindered by the upper Bollinger band twice, as the first time at 12:00 GMT it slightly fell and resumed the surge at 13:00 GMT. However, at 15:00 GMT the pair dropped significantly and remained near to the 1.1185 level until 2:00 GMT on Tuesday. Since then the rate skyrocketed, as it has even broken through the upper Bollinger band.
Hourly chart
SWFX sentiment bearish on Tuesday
OANDA trader bearish sentiment has increased compared to Monday's 56.74%, as, at the moment, 58.50% of OANDA open positions are short. In the meantime, SAXO Bank clients have increased their bearish stance, as their open short positions are now at 67.06% compared to 65.47% of last trading session.