- SWFX market sentiment is 60% bullish
- Trader pending orders are 58% to sell
- Pair opened Thursday's session at the 1.0906 level
- Aggregate daily technical indicators bet EUR/USD will remain unchanged
- Economic events to watch over the next 24 hours: US Core Durable Goods Orders; US Unemployment Claims
Oil prices jumped above the $50 level on Wednesday as US crude oil inventories dropped unexpectedly last week. According to the Energy Information Administration's report, domestic crude stockpiles fell 0.6 million barrels in the week ended October 21, following the preceding week's 5.2 million barrel decline, while market analysts anticipated a slight increase of 0.7 million barrels during the reported period. Meanwhile, the American Petroleum Institute's preliminary report released on Tuesday suggested a 4.8 million barrel rise for the same week. Crude oil stocks usually rise at this time of year as the summer driving season ends and refineries enter the autumn turnaround season. The EIA also said that gasoline stocks dropped 2 million barrels, whereas analysts had expectations for a 1 million barrel decline. Moreover, distillate stockpiles were down 3.4 million barrels, surpassing the 1.4 million barrel drop forecast.
German business sentiment improved unexpectedly in October, reaching its highest since April 2014, a private survey showed on Tuesday. According to the Munich-based Ifo Institute, the Business Climate Index, which is based on a monthly survey of some 7,000 firms, jumped to 110.5 points on a monthly seasonally adjusted basis in October, following the preceding month's 109.5 and surpassing the 109.6 market forecast. The increase in the headline Index was mainly driven by the sentiment improvement in the manufacturing and construction sectors. According to the Ifo's subsurvey, the Current Assessment Index, which measures current conditions in the Euro zone's largest economy, came in at 115.0 in October, up from September's 114.7 points, whereas analysts anticipated a slight increase to 114.9. Furthermore, the Business Expectations Index, which indicates companies' outlook for the next six months, advanced to 106.1 in the same month, compared to the previous month's 104.5 and forecasts for a reading of 104.5 points. The German economy is widely expected to lose some of its steam in the Q3, after growing 0.7% in the Q1 and 0.4% in the Q2. The Euro rose against the US Dollar to 1.0880 from 1.0875 ahead of the release.
Upcoming fundamentals: Concentrate on US data at 12:30 GMT
There will be various, minor data releases occurring during today's trading session and the early morning of tomorrow. However, as experience has shown, most of them will not even affect the markets slightly at the moment of the release. Due to that fact we would advise to keep an eye out for the US Core Durable Goods Orders and most importantly US Unemployment Claims. Both of the data releases are set for 12:30 GMT.
EUR/USD trades below Brexit low on Thursday
Daily chart: The common European currency fell after it began Thursday's trading just below the Brexit low level of 1.0912 against the US Dollar. Previously, during Wednesday's trading session the currency exchange rate reached not only above the Brexit low level but also reached above the combined resistance put up by the weekly PP at 1.0927 and monthly S3 at 1.0929. Regarding the rest of Thursday's session it is likely that the rate will continue to move lower, however, the signals are mixed, as it might remain unchanged for today.Daily chart
Hourly chart: The hourly chart for the pair reveals that there were two attempts to break higher. The first one was stopped by the weekly PP and monthly S3 at 1.0929, and the second succeeded to break through the mentioned levels of significance. However, the last breakout was soon stopped by the 200-hour SMA at 1.0941. Since then the rate has retreated back below Brexit low levels, where it met with the combined support of the 55 and 100-hour SMAs and the lower Bollinger band.
Hourly chart
Traders remain bullish
SWFX traders remain bullish on the pair, as 60% of open positions are long. In the meantime, pending commands remain bearish, as 58% of trader set up orders are to sell.
OANDA traders remain bullish on Thursday, as 60.12% of open EUR/USD positions are long. Meanwhile, SAXO Bank clients have become bearish neutral, as open short positions now add up to 50.46%, compared to 51.63% long positions during the previous trading session.