- 57% of pending orders are set to sell
- Open positions are neutral at the moment
- Key resistance lies around 1.10
- Short traders are now focusing on recent low at 1.0848
- Economic events to watch in the next 24 hours: German and French Trade Balance (Jun), US Non-Farm Payrolls/Unemployment Rate (Jul)
German factory orders rose sharply in June, as a weak Euro fuelled robust global demand even amid turbulence in Greece and China. German industrial orders surged by a much stronger than expected 2% in June, compared with a 0.3% decline in May. Economists had predicted a modest rise of 0.3%. While domestic orders dropped 2% compared with May, demand from other countries in the Euro zone rose 2.3% and orders from outside the currency bloc soared 6.3%. In annual terms, the measure increased 7.2% in the measured month, after recording a revised 4.5% growth in the previous month, measured on a non-seasonally adjusted basis.
Meanwhile, the German manufacturing sector saw a slight decline in its pace of growth in July with the respective PMI reading sliding to 51.8, down from June's 51.9. However, business sentiment among German top executives recovered from June levels. The headline Ifo Business Climate Index came in at 108 points in July, above the 107.4 booked a month earlier. The Current Assessment sub-survey, indicating current conditions in the Euro zone's number one economy, booked 113.9 points, after the previous month's 113.1, and the Ifo Expectations Index, indicating firms' projections for the next six months ahead, came in 102.4, from 102.0 in June.
Upcoming fundamentals: Non-Farm payrolls in focus before September Fed meeting
Markets are waiting for the US labour market statistics to be released later today. This report is closely watched by the Fed, which is going to decide whether to increase interest rates in September. At the moment the average expectation calls for a rise in employment of 222,000 in July, down slightly from 223,000 in June. The data is due today at 12:30 GMT.
EUR/USD picked up marginally on Thursday
EUR/USD continued to trade with positive momentum yesterday, but the pair added just 20 pips in course of the session. While it expects important US fundamentals on Friday, any movements before that are likely to be muted. In case of a negative surprise, the cross may climb up to the Aug 3 high and monthly/weekly PPs at 1.10. On the other hand, positive data may provoke sell-offs down to the recent low at 1.0848, which is immediately followed by the May low at 1.0818. Meanwhile, technical indicators are still pointing sideways.Daily chart
In the one-hour chart the EUR/USD cross is showing a clear medium-term downtrend. By trading below the 200-hour SMA since the beginning of this week, it turns to be even less likely that the pair will put forward any up-trend scenario in the foreseeable future, as any gains should be capped by the mentioned simple moving average, currently at 1.0964.
Hourly chart
SWFX sentiment hits 50%, orders remain in red
Meanwhile, percentage of bullish positions at OANDA accounts for just 38.54% at the moment, while SAXO Bank market participants are also remaining strongly pessimistic towards the common currency, as their share of longs takes up just 34%.
Spreads (avg,pip) / Trading volume / Volatility
Community members expect Euro to weaken by the end of the week
Participants of the Dukascopy Community Forecasts quiz support the general negative view on the pair, with 60% of all votes being short at the moment.
A proponent of a near-term decline, geula4x, suggests that ""EUR/USD still seems bearish on the daily chart. Price is capped by the long-term down trend line, which has started on June 18, from around 1.1440 price level. This trend line confluences 1.1120 horizontal resistance area, near Friday's high as well as July 27 daily high. This is current resistance, while support lies around 1.0800 area." At the same time, rokasltu assumes that "EUR/USD rate presently is at value which more or less satisfies simultaneously buyers and sellers. Thus, I do not expect big movements during this week, closing around 1.10 level."