- SWFX market sentiment is 56% bearish
- Trader pending orders are 58% to sell
- Pair opened Friday's session at 1.0758
- Upcoming Events: US Average Hourly Earnings; US Non-Farm Employment Change; US Unemployment Rate; FOMC Member Evans' Speech; US ISM Non-Manufacturing PMI; US Factory Orders
The number of Americans filing for unemployment benefits dropped more than expected last week, official figures revealed on Thursday. The Labor Department reported initial jobless claims fell to a seasonally adjusted 246,000 in the week ending January 28 from the preceding week's upwardly revised 260,000, while analysts anticipated a slighter decline to 251,000. The result marked 100 weeks below the 300,000 level, the longest streak since 1973. At the Federal Reserve's last meeting, policymakers kept its benchmark overnight rate unchanged in a range of 0.50% to 0.75%. Thursday's data also showed that the four-moving average of claims, considered a better measure of labour market trends, advanced 2,250 to 248,000 last week. Furthermore, continuing claims declined 39,000 to 2.06 million during the week ended January 21, while their four-week moving average fell 13,000 to 2.08 million.
Last week's claims report has no impact on the NFP data for January, set for release on Friday. Economists expect nonfarm payrolls to show a gain of 170,000 jobs, following a sluggish December, when private companies created just 156,000 new jobs, missing the 175,000 gain forecast. Moreover, the unemployment rate is excepted to remain unchanged at 4.7% in January. Wage growth is likely to boost consumer spending and support economic growth in the Q1 of 2017.
Upcoming events: Loads of US data
During Friday's trading session the financial markets will be affected by the fundamental data releases occurring in the US. First a data package will be out at 13:30 GMT. The package will consist of US Average Hourly Earnings, Non-Farm Employment Change and Unemployment Rate. The Dukascopy research team will cover this data release on the live webinar. In addition, at 14:15 GMT FOMC member Evans is set to give a speech. Last but not least at 15:00 GMT US ISM Non-Manufacturing PMI and US Factory Orders will be out.
EUR/USD below resistance on Friday
Daily Chart: Due to falling below the weekly R1 at 1.0761 against the US Dollar, the common European currency began Friday's trading session just below that level. The currency exchange rate remained unchanged during the morning hours. However, from a technical perspective by looking at the daily chart the pair had no support until the level of 1.0709, where the weekly PP is located at. It is most likely that there are other support levels on different timeframes, which will hinder the fall of the Euro. Although, the pair will still most likely reach the weekly PP.Daily chart
Hourly chart: The hourly chart confirms the suspicions of a smaller time frame support levels. The rate was flat during the early hours of Friday's trading session because of the 100-hour SMA providing support just below the weekly R1. In addition, the currency pair is facing the 200-hour SMA at 1.0738. Only after the rate passes that level of significance the way to the weekly PP will be clear for the Greenback against the Euro.
Hourly chart
Bearish sentiment persists
SWFX traders have not changed their opinion regarding the pair, as 56% of open positions remain short. In the meantime, 58% of trader set up orders are to sell the Euro.
OANDA traders remain bearish, regarding the pair, as 54.61% of open EUR/USD positions were short on Friday, compared to 54.90% on Thursday. Meanwhile, SAXO bank traders have further decreased their bearish outlook, as 60.80% of open positions are short, compared to 64.55% previously.