- SWFX market sentiment is 64% bearish
- Trader set up pending orders are 53% to sell
- Pair opened Wednesday's session at the 1.1218 level
- Aggregate daily technical indicators bet EUR/USD will surge
- Economic events to watch over the next 24 hours: EU Industrial Production (August); US Import Prices (August);
On Thursday September 8, the European Central Bank decided to leave interest rates in the single currency area unchanged, but being open for more cuts in the upcoming months and renewed calls to politicians to apply more stimulus for the economic recovery. As a result, the ECB held the single currency area's main interest rate at zero. Also, the European Central Bank left its 1.7 trillion euro stimulus programme unchanged, brushing off concerns over economic shock waves from Britain's decision to leave the European Union. However, the ECB president Mario Draghi noted that uncertainty over the Brexit was among the factors dampening the Euro zone's growth and he unveiled a slightly weaker economic outlook for the bloc. Although, the ECB did not even discuss extending its 80 billion (per month) asset purchase programme, as president Mario Draghi noted "not so substantial to warrant a decision to act". The ECB President Mario Draghi also stayed that he is concerned over persistently low Euro zone inflation, which has fallen short of the ECB's near-2% target for more than three years. According to the fresh ECB staff forecasts, inflation rising very gradually, to 1.2% next year and 1.6% in 2018.
The number of Americans filing for unemployment benefits dropped unexpectedly, official data revealed on Thursday. According to the Labor Department, initial jobless claims fell 4,000 to a seasonally adjusted 259,000 in the week ended September 3, touching the lowest level since mid-July and following the preceding week's reading of 263,000. Market analysts anticipated a slight increase to 264,000 filings in the reported period. Last week's numbers market the 79th consecutive week of initial jobless claims remaining below the 300,000 level, the longest streak since 1973. There were no special factors influencing last week's claims data; however, jobless claims for Virginia, New Mexico, Alabama, Minnesota, Hawaii and Puerto Rico were estimated amid the Labor Day celebrated on Monday. Furthermore, the four-week moving average of initial jobless claims, considered a better measure of labor market trends, declined 1,750 to 261,250 during the same week. Meanwhile, the number of continuing jobless claims dropped 7,000 to 2.14 million in the week ending August 27, whereas the four-week moving average of continuing claims decreased 4,000 to 2.15 million. The claims data together with the latest JOLTS report suggest that the trend in employment growth remains strong.
Upcoming fundamentals: Industrial Production and Import Prices
The EUR/USD pair on Wednesday will be affected by minor data from the EU and the US. First will be the EU Industrial Production monthly change, which will be released at 9:00 GMT. Later in the day the US Import Price month-to-month change will be out at 12:30 GMT.
EUR/USD reaches trend line
Daily chart: The common European currency fell and confirmed a channel up pattern's lower trend line against the US Dollar on Tuesday and once more on Wednesday. However, the general trend of Wednesday's early morning trading indicates that the support provided by the channel's support line, combined with the 20 and 100-day simple moving averages around the level of 1.1210, is stronger than the resistance put up by the weekly PP at 1.1233. It is most likely, that the Euro will appreciate against the Buck by the end of today's trading session.Daily chart
Hourly chart: The hourly chart for the EUR/USD pair shows that the rebound of the currency exchange rate happened around 19:00 GMT, and it occurred at the trend line at 1.1209. However, the fall to the trend line happened before the rebound swiftly, as by 17:00 GMT the rate was still above the weekly PP at 1.1233
Hourly chart
SWFX traders remain bearish
OANDA trader bearish sentiment has slightly increased, compared to Tuesday's 57.30%, as, at the moment, 57.80% of OANDA open positions are short. In the meantime, SAXO Bank clients have also slightly decreased their bearish stance, as their open short positions are now at 66.17% compared to 66.70% of last trading session.