- SWFX market sentiment is 64% bearish
- Trader set up pending orders are 54% to sell
- Pair opened Friday's session at the 1.1243 level
- Aggregate daily technical indicators bet EUR/USD will surge
- Economic events to watch over the next 24 hours: US CPI (August);
The number of Americans filing for unemployment aid rose to a seasonally adjusted 260,000 in the week ended September 10, slightly up from the preceding week's 259,000 claims, while market analysts anticipated an increase to 262,000 during the reported week. It was the 80th consecutive week initial jobless claims remained below the 300,000 level, the longest streak since 1973. The four-moving average of claims, considered a better measure of labor market trends, fell 500 to 260,750 during the same week. Separate data released by the Labor Department revealed that the PPI came in at 0.0% in August, up from July's decline of 0.4%. However, markets expected the Index to increase 0.3%. The so-called core PPI advanced 0.1% last month, also up from July's 0.3% fall and in line with economists' projections. Other Thursday's data showed that US retail sales declined 0.3% monthover-month in August, compared to July upwardly revised 0.1% rise, whereas economic desks penciled in a slight drop of 0.1% in the reported month. Excluding automobiles, gasoline, building materials and food services, retail sales slipped 0.1% last month, following the previous month downwardly revised fall of 0.4% and falling behind the 0.3% growth forecast.
According to the official figures, industrial production across the 19- country Euro zone slipped by 1.1% in July, showing a development that could seriously weigh on the region's third-quarter growth. It is worth to point out that industrial production in the single currency region has been highly volatile for the last months, jumping in some and slumping in others. But overall, during the last 12 months it has declined, a key source of weakness for the UK economy that has struggled to create jobs and now are facing strong uncertainties after the UK's June vote to leave the European Union. In the meantime, the production of capital goods decreased by 1.7%, while energy production was 1.4% lower and durable consumer goods production lost 0.7%. The production of intermediate goods, in turn, was down 0.5% while production of non-durable consumer goods was unchanged. On the annual pace, industrial production in the Euro bloc was 0.5% lower, which was ahead of analysts' expectations of a 0.7% drop. In the EU-28 group of countries, industrial production went down 1% on the month and 0.1% on the yearly period.
Upcoming fundamentals: US CPI
After many and various data releases occurring on Thursday, it will be a quiet trading week's last session. There is only one notable fundamental data release set to occur during Friday's trading session, and it will be the US CPI data. Traders should look at the US CPI and US Core CPI on a month-to-month basis. The two indicators are forecasted to have an increase respectively of 0.1% and 0.2% for the CPI and Core CPI.
EUR/USD remains above weekly PP
Daily chart: The common European currency traded just above the weekly PP against the US Dollar on Friday morning. Previously, on Thursday the currency exchange rate began the day at almost the same position. However, after seeing a lot of volatility the pair ended the day at 1.1243, which is slightly below the opening price of 1.1249. Although, as the general trend of the rate is upwards aimed, and it is in an ascending channel pattern, it is most likely that the pair will soon surge. Moreover, daily aggregate technical indicators confirm the hypothesis of a rise of the exchange rate by the end of today's session.Daily chart
Hourly chart: The hourly chart for the EUR/USD pair shows that the currency exchange rate for the past 24 hours moved slightly lower in general. However, a larger decline was stopped by the support cluster just below it. The cluster s made up from the lower Bollinger band, the 55, 100 and 200-hour SMAs and the weekly PP. Although, there was one divergence from the general movement. As disappointing fundamental data came from the US, the rate bounced at 12:30 GMT, but it retreated to trade as before by 13:00 GMT. In general the chart supports the hypothesis of a surge of the rate, as the SMAs will prep the rate higher, and there are no major resistance levels standing in the pair's way.
Hourly chart
Traders remain bearish
OANDA trader bearish sentiment has slightly decreased, compared to Thursday's 56.71%, as, at the moment, 56.47% 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 66.87% compared to 68.00% of last trading session.