- SWFX market sentiment is 56% bearish
- Trader pending orders are 61% to sell
- Pair opened Thursday's session at the 1.1204 level
- Aggregate daily technical indicators bet EUR/USD will surge
- Economic events to watch over the next 24 hours: ECB Monetary Policy Meeting Accounts; US Unemployment Claims
US private companies increased their job creation less than expected last month, official data revealed on Wednesday. According to the ADP National Employment Report, non-farm private employment rose 154,000 on a seasonally adjusted basis in September, compared to the preceding month's downwardly revised figure of 175,000, while market analysts expected a slighter drop to 166,000 during the reported period. The ADP report comes out every month two days ahead of the NFP report, which is expected to announce 171,000 new jobs for September, following the previous month's 151,000. Meanwhile, ISM's Manufacturing PMI came in at 57.1, in September, after touching its lowest level of 51.4 points in August, while markets expect the Index to rise to 53.1. Furthermore, factory orders for US goods jumped 0.2%, surpassing the 0.4% fall forecast. The services sector accounts for approximately 80% of the US economy. In the meantime, the EIA data released on Wednesday showed US crude oil inventories dropped 3.0 million barrels last week, declining for the fifth consecutive week. Analysts anticipated a buildup of 1.1 million barrels in the week ending September 30, after the previous week's 1.9 million-barrel fall.
Producer prices in the Euro zone dropped at a faster than expected pace in August, after rising for three consecutive months, official figures revealed on Tuesday. According to the European Union's statistics agency Eurostat, the Producer Price Index for the region fell 0.2% on a monthly basis in August, compared to the preceding month's upwardly revised 0.3% gain, while market analysts expected producer prices to increase 0.1% in the reported month. On an annual basis, the PPI declined 2.1% in the same month, slightly up from the upwardly revised fall of 2.6% and in line with analysts' expectations. The August disappointing data confirmed that inflation pressures in the Euro zone remain weak. The drop was mainly driven by low energy prices, which fell 0.8% month-overmonth in August. However, excluding energy prices, the PPI remained stable in the eight month of the year. Economists widely expect consumer prices to rise sharply in the final months of 2016 and in the early part of 2017. After the release, the Euro was seen trading at 0.8746 against the British Pound, 1.0932 against the Swiss Franc, 1.1172 against the US Dollar and 114.31 against the Japanese Yen.
Upcoming fundamentals: ECB meeting and official US unemployment
Wednesday gave a barrage of data and left almost nothing to Thursday. However, there are two notable events during today's trading session. The ECB will release their Monetary Policy Meeting Accounts at 11:30 GMT. There will be one data release affecting the strength of the US Dollar and subsequently all of the market, as the US Unemployment Claims will be out at 12:30 GMT. The data might come in lower than expected due to the fact that on Tuesday the ADP Non-Farm Employment change came in 12,000 lower than forecasted.
EUR/USD trades at 1.12 mark on Thursday morning
Daily chart: The common European currency had remained almost unchanged against the US Dollar on Thursday morning, as the currency pair was at 1.12 on early morning. Although, as the rate had tried to surge and was stopped by the 20-day SMA, it had moved lower than the opening price of 1.1204. Previously, the currency exchange rate bounced between the levels of 1.1233 and 1.1189, which is consistent with a channel down pattern, in accordance with which the pair has been trading since September 25. It is most likely that the pair will continue to bounce between the channel's borders.Daily chart
Hourly chart: The hourly chart for the EUR/USD pair shows a complicated picture, as the currency exchange rate kept bouncing between various SMAs during the past 24 hours. However, the general situation is that the pair attempted to surge past the resistance cluster put up by the weekly and monthly PPs, and after two attempts the rate moved lower. Moreover, on early Thursday morning the Euro had slipped below all of the SMAs, as it passed the 55-hour SMA at 4:00 GMT. Due to that, there is no notable short term support, except the short term channel down pattern's lower trend line around the level of 1.1180.
Hourly chart
SWFX sentiment remains unchanged
Trader sentiment remains unchanged, as 56% of open positions are short. In the meantime, pending commands are 61% to sell the pair.
OANDA bearish trader sentiment increased on Thursday, as 57.89% of open positions are short. In the meantime, SAXO Bank clients have increased their bearish stance, as open short positions now add up to 65.25% compared to 64.44% during the previous trading session.