- SWFX market sentiment is 64% bearish
- Trader set up pending orders are 49% to buy
- Pair opened Tuesday's session at the 1.1235 level
- Aggregate daily technical indicators bet EUR/USD will surge
- Economic events to watch over the next 24 hours: German ZEW Survey (September); US Monthly Budget Statement (August); French 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: Various minor data from both sides
During the next upcoming 24 hours there will be a few, minor data releases, which are set to affect the currency exchange rate. First of all it will be the German ZEW Survey for September at 9:00 GMT, and it will reveal the economic sentiment and the current situation indices. Afterwards at 18:00 GMT the US Monthly Budget Statement for August will be out, and as usual it will be negative. On Early Wednesday morning the French CPI data for August will be out.
EUR/USD remains flat on Tuesday
Daily chart: The most traded currency pair on the market remained flat on Tuesday morning, as the markets expect new data about the strength of the underlying economies. Mainly the CPI data from the EU is set to be out during this week with the Germans being first during today's trading session. From a technical perspective it can be seen that the currency exchange rate is searching for support near the weekly PP at 1.1233. As the 20 and 100-day SMAs move in from the downside, the rate is set to surge in the near future.Daily chart
Hourly chart: The hourly chart for the EUR/USD pair shows that the currency exchange rate was being moved upward by the 100-hour SMA until the rate encountered the 55-hour SMA from the upside, which pressured the rate to fall by 8:00 GMT. By 9:00 GMT the rate had reached the lower Bollinger band and changed its direction by 15:00 GMT, as it rebounded from the 1.1214 level. Afterwards, the rate once more bounced to the SMAs, and encountered their resistance. All in all, these moves show a loss of volatility, as the rate concentrates to be in limbo around the weekly PP at 1.1233.
Hourly chart
SWFX traders remain bearish
OANDA trader bearish sentiment has decreased, compared to Monday's 59.16%, as, at the moment, 57.30% 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 66.70% compared to 67.45% of last trading session.