- SWFX market sentiment is 62% bearish
- Trader set up pending orders are 53% short
- Pair opened Thursday's session at the 1.1238 level
- Aggregate daily technical indicators bet EUR/USD will remain unchanged
- Economic events to watch over the next 24 hours: ECB Rate; ECB Press Conference; US Initial Jobless Claims (Sep 3);
According to the Eurostat release, the EU's the Euro zone GDP expanded by 0.3% in line with economists expectations. Following increase equals 1.8 and 1.6% compared to the same period during the previous year. Meanwhile, growth was 0.5% in both zones for the first half of 2016. Romania confirmed 1.5% while Hungary 1.0% showing highest growth while France, Italy and Finland, in turn, stagnated. Also, the report from Eurostat showed that weakness in domestic demand was behind the slowdown in the second quarter. Moreover, gross investment was relatively flat following a revised 0.4% increase in the first quarter, while consumer spending added 0.2% and government consumption advanced 0.2%. In the meantime, despite the European Central Bank decision to adopt negative deposit rates just over two years ago, and quantitative easing over a year ago, Euro zone inflation remains at extremely low levels. During the previous week, core consumer price inflation equals 0.8% on a yearly period, less than half the ECB's target of near 2%. Also, the Euro zone unemployment remains steady for the third month in-a-row in July, being at 10.1%.
The US service sector expanded at the slowest pace in more than six years, official data revealed on Tuesday. The Institute for Supply Management said that its Non-Manufacturing PMI dropped to 51.4 points in August from the preceding month's 55.5, whereas market analysts anticipated a slight decrease to 55.4 in the reported month. Last month's reading was the weakest since February 2010. Nevertheless, readings above 50 points indicate an expansion in the services sector, and the US service sector grew for 79 consecutive months. Furthermore, the Non-Manufacturing Business Activity Index fell to 51.8, compared to July's reading of 59.3, showing growth for 85 straight months. The New Orders Index declined to 51.4, following the previous month's 60.3. The Employment Index decreased to 50.7 percent from the July reading of 51.4. The Prices Index came in at 51.8 in August, down from the preceding month's reading of 51.9, reflecting growth for the fifth consecutive month. According to the ISM, 11 out of 18 non-manufacturing sectors reported growth last month. After the data release, the EUR/USD pair was seen trading at $1.1213 from around $1.1159 ahead of the release, whereas the GBP/USD pair was at $1.3404 from $1.3367 prior.
Upcoming fundamentals: ECB rate and US Initial Jobless Claims
This Thursday is a big day for Euro, as today the European Central Bank announces their rate decision at 11:45. Afterwards will follow the press conference at 12:30 GMT, where the heads of the bank will speak as usual with every phrase affecting all the currency exchange rates, which involve the common European currency. In the meantime, US Initial Jobless Claims will be out for the week of September 3. However, these news are most likely to be overshadowed by the ECB.
EUR/USD fluctuates near 1.1250 on Thursday
Daily chart: The common European currency is surging on Thursday morning against the US Dollar, as the currency exchange rate remains near previously reached heights around the level of 1.1250. The surge is ongoing on Thursday due to the fact that the rate did not sustain the surge on Wednesday, after the rate had jumped on Tuesday. The pair retreated and found support in the weekly R1 at 1.1230 and rebounded against it. Today's movement is a continuation of the rebound and there are no reasons for it to stop, as the next resistance still remains at 1.1305.Daily chart
Hourly chart: The hourly chart for the EUR/USD pair shows that the rate has been flat. With it by 9:00 GMT the volatility reached such low levels that the Bollinger bands had a distance of 24 pips between them. The currency exchange rate remained in this range for the past 24 hours, as the markets expect the ECB rate announcement.
Hourly chart
SWFX bearish sentiment increases
OANDA trader bearish sentiment has decreased compared to Thursday's 57.64%, as, at the moment, 56.42% of OANDA open positions are short. In the meantime, SAXO Bank clients have increased their bearish stance almost unnoticeably, as their open short positions are now at 68.12% compared to 68.02% of last trading session.