- SWFX market sentiment is 52% bearish
- Trader pending orders are 62% to sell
- Pair opened Monday's session at the 1.1064 level
- Aggregate daily technical indicators bet EUR/USD will surge
- Economic events to watch over the next 24 hours: EU Retail PMI, EU Sentix Investor Confidence, EU Retail Sales, Eurogroup Meetings; US Labor Market Conditions Index; US Loan Officer Survey; US Consumer Credit
US private companies added fewer than expected jobs last month, whereas the unemployment rate improved slightly, the October Non-Farm Payrolls report showed on Friday. According to the Bureau of Labor Statistics, the US economy created 161,000 new jobs in the reported period, while market analysts expected nonfarm payrolls to increase by 174,000. Meanwhile, the September gain was revised up to 191,000 from the originally reported 156,000. However, the odds of a December rate remained quite high, despite today's disappointing jobs report. Furthermore, average hourly earnings advanced 2.8% and 0.4% on annual and monthly basis, respectively, while average weekly remained unchanged at 34.4 last month. The unemployment rate declined unexpectedly to 4.9% in October, following the preceding month's 5.0%. After the release, the US Dollar declined slightly against other major currencies, trading at 1.1111 against the Euro and 103.10 against the Japanese Yen. Separately, the Bureau of Economic Analysis said on Friday that the US trade deficit narrowed to $36.44 billion in the same month from September's gap of $40.46 billion, which was revised up from the originally reported $40.70 billion deficit. Economists expected the US trade gap to decrease to $37.80 billion during October.
The number of Americans filing for unemployment benefits rose unexpectedly last week, official figures showed on Wednesday. According to the US Department of Labor, initial jobless claims jumped 7,000 to a seasonally adjusted 265,000 in the week ended October 29, the highest reading since the beginning of August. That marked the 87th consecutive week of initial claims below the 300,000 level, the longest streak since 1973. Meanwhile, market analysts anticipated a slight decrease to 257,000 filings from the preceding week's 258,000. The four-week moving average of claims, which is considered a better measure of labor market trends, rose 4,750 to 257,750 last week. Other data released on Wednesday showed that the Institute for Supply Management's NonManufacturing Index declined to 54.8 in October from 57.1 seen in September, while economists anticipated a slighter decrease to 56.2 points. However, any reading above the 50 point-level indicates expansion in the service sector. The Business Activity Index and Employment Index fell to 57.7 and 53.1 in the same month, respectively. Separately, the US Census Bureau said factory orders advanced 0.3% in September, following the prior month's gain of 0.4% and surpassing the 0.2% rise forecast.
Upcoming fundamentals: Loads of white noise data
There are a lot of data releases set to occur during Monday's trading session. However, they will not affect the markets by increasing the short term volatility. Instead market participants should look at them for the general understanding of the situation in the European and US economies. From the EU statisticians data will begin coming in at 9:10 GMT, as the Retail PMI will be out. Afterwards, the Sentix Investor Confidence indictor will be published at 9:30 GMT. EU Retail Sales will be available at 10:00 GMT. Moreover, regarding the EU, the Eurogroup is holding a meeting throughout the day. Clues regarding the strength of the US economy will be released in the second half of the day for people following the GMT timeline. At 15:00 GMT US Labor Market Conditions Index will be published, and at 20:00 GMT US Consumer Credit data will be available. Moreover, the US Loan Officer Survey is tentative.
Euro begins the week lower
Daily chart: The common European currency slightly appreciated against the US Dollar on Monday morning. However, the rate opened the day's trading session a lot lower than the previous close of 1.1138, as Monday's trading began at 1.1063. There is one simple reason for this 75 pip fall. The Director of the FBI once more announced that Hillary Clinton, a candidate for the presidency of the United States, will not be charged with criminal accusations after the recent e-mail review. It is most likely, that the Euro will begin regaining those losses against the Greenback, as it passed the weekly PP during Monday's morning.Daily chart
Hourly chart: The hourly chart reveals, that the EUR/USD rate was slowly moving higher on Friday, and there is nothing special to note. However, it can be clearly seen that on Monday, after the initial lower opening, the currency exchange rate surged past the weekly PP and 100-hour SMA only to be later stopped and reversed by the 55-hour SMA. Since then the rate has been slowly falling.
Hourly chart
Traders slightly move to the bearish side
Traders remain slightly bearish on the pair, as 52% of open positions are short on Monday. Meanwhile, 62% of trader set up orders are to sell.
OANDA traders remain with a bearish outlook, as 58.46% of open EUR/USD positions are short on Monday. Meanwhile, SAXO Bank clients have decreased their bearishness, as open short positions now add up to 65.87%, compared to 68.9% short positions during the previous trading session.