- SWFX market sentiment is 63% bearish
- Trader set up pending orders are 50% to buy
- Pair opened Monday's session at the 1.1234 level
- Aggregate daily technical indicators bet EUR/USD will surge
- Economic events to watch over the next 24 hours: Fed's Lockhart's Speech; Fed's Kashkari's Speech; Fed's Brainard's Speech; German CPI (August)
On Thursday September 8, the European Central Bank decided to leave interest rates in the single currency area unchanged, but being open for more cuts in the upcoming months and renewed calls to politicians to apply more stimulus for the economic recovery. As a result, the ECB held the single currency area's main interest rate at zero. Also, the European Central Bank left its 1.7 trillion euro stimulus programme unchanged, brushing off concerns over economic shock waves from Britain's decision to leave the European Union. However, the ECB president Mario Draghi noted that uncertainty over the Brexit was among the factors dampening the Euro zone's growth and he unveiled a slightly weaker economic outlook for the bloc. Although, the ECB did not even discuss extending its 80 billion (per month) asset purchase programme, as president Mario Draghi noted "not so substantial to warrant a decision to act". The ECB President Mario Draghi also stayed that he is concerned over persistently low Euro zone inflation, which has fallen short of the ECB's near-2% target for more than three years. According to the fresh ECB staff forecasts, inflation rising very gradually, to 1.2% next year and 1.6% in 2018.
The number of Americans filing for unemployment benefits dropped unexpectedly, official data revealed on Thursday. According to the Labor Department, initial jobless claims fell 4,000 to a seasonally adjusted 259,000 in the week ended September 3, touching the lowest level since mid-July and following the preceding week's reading of 263,000. Market analysts anticipated a slight increase to 264,000 filings in the reported period. Last week's numbers market the 79th consecutive week of initial jobless claims remaining below the 300,000 level, the longest streak since 1973. There were no special factors influencing last week's claims data; however, jobless claims for Virginia, New Mexico, Alabama, Minnesota, Hawaii and Puerto Rico were estimated amid the Labor Day celebrated on Monday. Furthermore, the four-week moving average of initial jobless claims, considered a better measure of labor market trends, declined 1,750 to 261,250 during the same week. Meanwhile, the number of continuing jobless claims dropped 7,000 to 2.14 million in the week ending August 27, whereas the four-week moving average of continuing claims decreased 4,000 to 2.15 million. The claims data together with the latest JOLTS report suggest that the trend in employment growth remains strong.
Upcoming fundamentals: Fed speeches and German CPI
Monday's trading session will have no notable data releases, as the most notable information will come from various speakers from the Federal Reserve. First of all Fed's Lockhart will speak at 12:00 GMT. Afterwards, Kashkari will express his views at 17:00 GMT, and he will be followed shortly by Brainard at 17:15 GMT. However, the Germans will be up early on Tuesday, as the German CPI for August is set to be published at 6:00 GMT.
EUR/USD set for 1.1325 mark
Daily chart: The common European currency started a new week against the US Dollar at 1.1234, which is slightly above the weekly pivot point at 1.1233. Due to that, the pair is most likely to surge during Monday's trading session, as the currency exchange rate faces no resistance up to the level of 1.1326, where the first weekly resistance is located at. The weekly R1 is also a part of a stronger cluster, as the monthly R1 and the upper Bollinger band are located respectively at 1.1334 and 1.1337.Daily chart
Hourly chart: On the hourly chart for the EUR/USD pair it can be seen, that the currency pair fell on Friday morning by starting the fall at 6:00 GMT. The rate fell gradually through various support levels one by one, until it reached the combined support cluster of the channel upward trend's lower line, 200-hour SMA and the monthly PP around the level of 1.1190. There the currency exchange rate rebounded and it has been slowly surging since then.
Hourly chart
SWFX sentiment unchanged on Monday
OANDA trader bearish sentiment has remained almost unchanged, compared to Friday's 59.26%, as, at the moment, 59.16% 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 67.45% compared to 69.43% of last trading session..