- SWFX market sentiment is 61% bearish
- Trader set up pending orders are 56% short
- Pair opened Thursday's session at the 1.1288 level
- Aggregate daily technical indicators bet EUR/USD will remain unchanged
- Economic events to watch over the next 24 hours: EU Current Account (June); EU CPI (July); EU ECB Monetary Policy Accounts; US Initial Jobless Claims (Aug 13); US Philly Fed Manufacturing (Aug); FOMC member Dudley speaks; US Leading Indicators (July)
US crude oil inventories dropped after three consecutive weeks of gains, fresh data showed on Wednesday. According to the Energy Information Administration's (EIA) weekly report, US oil stockpiles fell 2.5 million barrels in the week ended August 12, compared to the 1.1 million barrel upturn seen in the previous seven days, while market analysts anticipated a slight increase of 300,000 barrels in the reported period. Furthermore, the EIA reported that gasoline inventories dropped 2.7 million barrels in the same period, following the 2.8 million barrel decline seen previously, whereas markets pencilled in a decrease of 1.5 million barrels. Meanwhile, distillate stockpiles rose 1.9 million barrels, after falling 2.0 million in the preceding week, while economic desks expected to see a 600,000 drop. On Tuesday, the American Petroleum Institute (API) reported a bigger-than-expected 1 million-barrel fall in US crude oil inventories and a 2.2 million climb in gasoline stockpiles for the week ending August 12. Oil prices rebounded from their lows they touched two weeks ago amid fresh talks by some OPEC members to restrain output at the September meeting in Algiers. Nevertheless, analysts remain sceptical, arguing that the OPEC cartel and non-OPEC countries will not reach an agreement at their upcoming meeting next month.
US core consumer prices grew less than expected last month, official data showed on Tuesday. According to the Department of Labor, the core Consumer Price Index (CPI) rose 0.1% on a monthly seasonally adjusted basis in July, compared to the 0.2% hike seen in the previous month. Economic desks expected the core CPI to remain unchanged from June. On an annual basis, core inflation increased 2.2% in the reported month, while market analysts predicted the indicator to come in at 2.3% in July, unchanged from last month. Including food and energy, consumer prices dropped to 0.0% month-over-month in the seventh month of the year, down from the 0.2% upturn registered in June, but in line with analysts' expectations. Year-over-year, inflation added 0.8% last month, compared to the 1.0% increase seen in the first month of summer. The US CPI data along with the latest retail sales figures added to concerns about the health of the US economy, raising doubts as to whether the Federal Reserve will increase interest rates this year, as it formally adopted a 2% inflation target back in January 2012. Meanwhile, other data released on Tuesday showed that building permits fell 0.1% to 1.152 million units in July, after rising 1.5% to 1.153 million units in the preceding month, while markets pencilled in an increase of 0.5% to 1.159 million in the reported month.
Upcoming fundamentals: Statistics and central banks on Thursday
Thursday is a busy day for fundamental data, as though the whole day data will be pouring in. First of all the EU Current Account for June will be released at 8:00 GMT, and the data will be available as seasonally adjusted and non-adjusted. Afterwards, at 9:00 GMT EU CPI data for July will be out, and it will be published on a month-to-month and yearly basis. At 11:30 information on the European Central Bank will be available, as ECB Monetary Policy Accounts will be published at that time. In the second half of the day, data from the US will indicate at the strength of the US Dollar, as US Initial Jobless Claims will be out at 12:30. At the same time Philly Fed Manufacturing index for August will be out, and it is forecasted to be a 1.2. At 14:00 GMT the FOMC member Dudely will give a speech, and the US Leading Indicators for July will be published.
EUR/USD slows down the surge on Thursday
Daily chart: The common European currency is slowing down its appreciation against the US Dollar, as the currency exchange rate reached the second weekly resistance line at 1.1302. However, the rate has not been stopped by the resistance, as the pair had not only been more volatile to the upside up to the level of 1.1329, but also it traded at 1.1305 by 5:00 GMT. Due to this and other factors, it is most likely that the rate will move north to the second monthly resistance at 1.1353 during this week. However, it is possible, that it retreats to the monthly R1 at 1.1263 before the surge continues.Daily chart
Hourly chart: On the hourly chart it can be seen that the Euro depreciated against the US Dollar, as the rate started falling at 2:00 GMT on Wednesday and fell to the combined support cluster of the 20-hour SMA at 1.1266 and monthly R1 at 1.1263. The pair bounced between the support cluster and the upper Bollinger band around 1.1280, until at 18:00 GMT it became highly volatile between the levels of 1.1241 and 1.1316. Afterwards the currency exchange rate surged to the pattern's upper trend line at 1.1325 by 1:00 GMT and bounced off it, retreating to the second weekly resistance at 1.1302 by 2:00 GMT, above which it has been fluctuating since then.
Hourly chart
SWFX sentiment unchanged on Thursday
OANDA trader bearish sentiment has decreased compared to Wednesday's 62.44%, as, at the moment, 61.75% of OANDA open positions are short. In addition, SAXO Bank clients have also decreased their bearish stance, as their open short positions are now at 68.23% compared to 70.22% of last trading session.