- SWFX market sentiment is 57% bullish
- Trader pending orders are 62% to sell
- Pair opened Thursday's session at the 1.0688 level
- Aggregate daily technical indicators bet EUR/USD will remain unchanged
- Economic events to watch over the next 24 hours: EU Final CPI; ECB Monetary Policy Meeting Accounts; US Building Permits; US CPI; US Core CPI; US Philly Fed Manufacturing Index; US Unemployment Claims; US Housing Starts; FOMC Member Dudley Speaks; Fed Chair Yellen Testifies, FOMC Member Brainard Speaks
US industrial production remained unchanged unexpectedly last month, amid the weak heating demand. According to the Federal Reserve, the country's industrial output was flat on a seasonally adjusted basis in October, following the preceding month's downwardly revised fall of 0.2%. However, market analysts anticipated a slight increase of 0.2% in the reported month. Utilities production declined 2.6% last month, after dropping 3.0% in September. The Fed said milder weather than normal reduced the demand for heating during October, offsetting gains of 0.2% and 2.1% in the manufacturing and mining categories, respectively. Data also showed that capacity utilization fell 0.1% to 75.3%. Separately, the US Department of Labor said its Producer Price Index came in at 0.0% in October, whereas economists expected the Index to advance 0.3% as in the prior month. Nevertheless, on an annual basis, the PPI rose 0.8%, the largest increase since December 2014, compared to September's gain of 0.7%. In the meantime, the Energy Information Administration reported on Wednesday that US crude oil inventories increased to a seasonally adjusted rate of 5.3 million barrels in the week ended November 11, following the previous week's rise of 2.4 million barrels.
The single currency economy expanded in the third quarter, showing a 0.3% in the region's gross domestic product (GDP) on the previous three months and up 1.6% on a yearly basis. The figures were spurred by a rebound in smaller countries, including Portugal, which saw its fastest growth pace since 2013. During the last week, the European Commission cut its GDP forecasts for the euro area on advanced political uncertainty and weaker global trade. The EU expects the currency bloc to grow 1.7% this year and 1.5% in 2017, after climbing 2% in 2015. In the meantime European stocks were mixed on Tuesday, as market sentiment remained globally positive following the election of Donald Trump as president of the United States last week, while disappointing German third-quarter growth weighed. Moreover, earlier on Tuesday, preliminary data showed that German gross domestic product went up 2% in the third quarter, disappointing expectations for an increase of 0.3% and down from a growth rate of 0.4% in the previous quarter.
Upcoming fundamentals: A lot of events and data releases
The markets will be affected by various data releases and events during Thursday's trading session. First of all the Europeans will set the strength of the Euro by publishing the EU Final CPI at 10:00 GMT and the ECB Monetary Policy Meeting Accounts at 12:30 GMT. Data, which will affect the strength of the US Dollar, is set to be released in the second half of the day. Most of it will be out at 13:30 GMT, when US Building Permits, CPI, Philly Fed Manufacturing and Unemployment Claims, and Housing Starts will be published. Later on in the day most likely even more important events will occur. At 13:50 GMT FOMC Member Dudley gives a speech. At 15:00 GMT is the event of the day, as Chairwoman of the Fed, Janet Yellen, is testifying about the economic outlook before the Joint Economic Committee. Afterwards, at 17:30 GMT FOMC Member Brainard is set to give a speech.
EUR/USD falls below 1.07 mark
Daily chart: The common European currency traded squeezed in between the January low level of 1.0709 from the upside and the weekly S1 at 1.0681 against the US Dollar on Thursday morning. Previously, on Wednesday morning the currency exchange rate marked its eight consecutive session of losses, as the Trump Jump of the US Dollar does not seem to actually stop. Some analysts are even putting parity of the exchange rate back on the discussion table. However, today's outlook seems kind of grim for traders, as the pair is most likely to remain squeezed in between the two levels.Daily chart
Hourly chart: The hourly chart for EUR/USD reveals exactly, what was forecasted previously. The 55-hour SMA pressured the pair lower by creating an almost 50 pip long red candle. In addition, the January low did stop that fall. However, the pair has already been trying to move lower, as the US Dollar breaks resistances. Since it had already reached below the weekly S1 twice, and all rebounds have been stopped by the 20-hour SMA, the pair is heading down.
Hourly chart
Trader sentiment positioned for a shift
SWFX traders remain bullish on the pair, as 57% of trader open positions were long on Thursday. Meanwhile, 62% of trader set up orders were to sell the pair.
OANDA traders have decreased their bullish outlook, as 62.25% of open EUR/USD positions are long on Thursday, compared to 66.04% long positions on Wednesday. Meanwhile, SAXO Bank clients have shifted their outlook and become bullish, as 56.18% of open positions are long now, compared to 50.54% short positions during the previous trading session.