- SWFX market sentiment is 51% bullish
- Trader pending orders are 60% to sell
- Pair opened Friday's session at the 1.1104 level
- Aggregate daily technical indicators bet EUR/USD will remain unchanged
- Economic events to watch over the next 24 hours: European PMIs; US Average Hourly Earnings; US Non-Farm Employment Change; US Unemployment Rate; US Trade Balance; FOMC Member Fischer Speaks
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.
As data released yesterday, US crude oil stockpiles advanced more than 14 million barrels during the previous week, showing the largest weekly build since the US Energy Department started keeping records back to 1982. As data suggests, West Texas Intermediate crude prices drop 1.13% with the report's release, stabilizing at $46.33. Brent prices, in turn, went down 1.42% at $47.92. Nevertheless, oil had rallied earlier on Wednesday on a sliding dollar, and after Colonial Pipeline had to shut down its main pipeline for a second time in as many months following an explosion. Overall, oil prices tumbled around 3% yesterday after a record weekly build in US crude stocks added to worries of all-time highs in OPEC production. In the meantime, the deal in Doha fell apart as OPEC's biggest producer Saudi Arabia would not accept Iran's position that it is their sovereign right to increase output. The general purpose of the most recent meeting was to finalize details of supply cuts and how cartel members and non-members led by the Russia will share the cuts. Although, the non-OPEC members including Azerbaijan, Brazil, Kazakhstan, Mexico, Oman and Russia together produce 21% of global supply or around 19.6 million barrels each day.
Upcoming fundamentals: EU PMIs and various US events
First of all, on Friday morning the European countries release their Final Services PMIs, which will occur from 8:15GMT, when the Spanish PMI is released first, to 9:00 GMT, when the common EU Final Services PMI will be published. However, it is most unlikely that this data will affect the currency exchange rate. US events will affect the strength of the Greenback today, as at 12:30 GMT US Average Hourly Earnings, Non-Farm Employment Change and Unemployment rate will be published. Moreover, the US trade balance will be out at the same time. However, rather keep a close look at the employment data. In addition, regarding US monetary policy, FOMC Member Fischer is set to give a speech at 20:00 GMT.
EUR/USD pauses the surge on Friday
Daily chart: The common European currency stopped appreciating against the US Dollar and moved lower on Friday morning, as the rate previously encountered resistance in the second half of Thursday's trading session. However, the currency rate had already almost reached the support provided by the weekly R2 at 1.1082, and the pair began to rebound. Moreover, the whole slight move to the downside is consistent with the ascending channel pattern, which has been in force for the past eight trading sessions.Daily chart
Hourly chart: The hourly chart for the EUR/USD pair shows that the pair remained rather unchanged in the last 24 hours. However, it did fall on early Thursday morning until it found support in the lower Bollinger band at 1.1060 and began to surge at 13:00 GMT. Afterwards, the pair surged to levels near 1.11 and has remained there since. Although, the 20 and 55-hour SMAs seem to have begun to push the rate up.
Hourly chart
Traders almost neutral on Friday
Traders are almost neutral, as 51% of open positions are short. Meanwhile, trader set up orders are short, as 60% of pending commands are to sell.
OANDA traders increased their bearish outlook, as 58.70% of open EUR/USD positions are short on Friday. In addition, SAXO Bank clients also have increased their bearishness, as open short positions now add up to 68.99%, compared to 68.02% short positions during the previous trading session.