- SWFX market sentiment is 62% bearish
- Trader set up pending orders are 55% to sell
- Pair opened Monday's session at the 1.1150 level
- Aggregate daily technical indicators bet EUR/USD will decline
- Economic events to watch over the next 24 hours: EU Current Account;
Consumer prices in the United States rose more than expected last month, official data revealed on Friday. According to the US Bureau of Labor Statistics, the overall Consumer Price Index (CPI) jumped 0.2% month-over-month in August, compared to the preceding month's reading of 0.0%, while market analysts anticipated a slighter acceleration to 0.1% during the reported month. On an annual basis, the CPI increased 1.1%, up from July's 0.8%. The socalled core CPI that excludes goods with high price volatility, such as food and energy, advanced 0.3% on a monthly basis in August after rising 0.1% in July, whereas economic desks expected the core inflation to grow 0.2% last month. On a yearly basis, the indicator climbed 2.3% during the reported period, slightly up from July's 2.2% reading. The modest rise in inflation last month is likely to be welcomed by the Federal Reserve at its meeting next Tuesday and Wednesday. However, it is widely expected to leave interest rates on hold amid weak retail sales, industrial production and job growth. Within the headline CPI basket, the price of gasoline dropped 0.9% last month, compared to July's 4.7% fall. Food prices were unchanged, whereas the cost of food consumed at home decreased for the 4th consecutive month.
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.
Upcoming fundamentals: EU Current Account
The EUR/USD pair will most likely be affected by the only notable EU fundamental data release, as it is a customary quiet Monday. The EU Current Account will be released at 8:00 GMT. IT is expected to be at 27.2 billion this month, which is a decrease, compared to 28.2 billion previously. However, it is also possible that a slight fluctuations might occur during the US NAHB Housing Market Index release. Although, the US housing data at 14:00 GMT is more likely to give a look into the US economy and its general state.
EUR/USD recoups after major losses
Daily chart: The common European currency is appreciated against the US Dollar on Monday morning, as the rate found support in the combined cluster of 55 and 200-day SMAs. Previously, on late Friday evening the currency exchange rate fell, and the Euro booked a day of almost 100 pip loss against the Greenback. It is most likely that the exchange rate will move northwards to the combined cluster of the weekly and monthly pivot points around the level of 1.1195 by the end of today's trading session. However, it is unlikely that the resistance will be broken.Daily chart
Hourly chart: The hourly chart for the EUR/USD pair shows that the fall occurred due to the fact that until 9:00 GMT on Friday the pair was trying to rebound against a major cluster of support. However, at 9:00 GMT the rate finally fell slightly below the cluster made up of all of the SMAs and the lower Bollinger band. At 12:30 GMT the Euro was hit again, as fundamental US data made it lose ground against the Greenback, as the currency exchange rate fell below the monthly PP at 1.1190. The markets kept processing that information until the close of the day's trading session.
Hourly chart
Traders remain bearish
OANDA trader bearish sentiment has declined gradually, as traders have become almost neutral with 50.41% of open positions being long. Previously, 56.47% of OANDA open positions were short. In the meantime, SAXO Bank clients have also decreased their bearish stance, as their open short positions are now at 60.63% compared to 66.87% of last trading session.