- Market sentiment remains moderately bullish (53%)
- Share of long pending orders in 100-pip range went up to 39%
- Bulls rely on support from 1.1154/28 area
- Bears are setting eyes on Aug 18-19 lows at 1.1017
- Economic events to watch in the next 24 hours: FOMC Members Tarullo, Dudley, Evans and Williams Speak; US Personal Spending/Income (Aug) and Pending Home Sales (Aug)
The Euro area's money supply growth eased more than expected in August, while the annual increase in private loans improved. The broad monetary aggregate M3, which is often an early indicator of future economic activity, rose 4.8% in the reported period from the last year, while markets forecasted the annual growth in money supply to remain unchanged at 5.3%. The narrower aggregate M1, which includes currency in circulation and overnight deposits, increased 11.4%, also weaker than the 12.2% growth seen in July.
Meanwhile, lending to the Euro zone households and corporations picked up slightly in August. According to the European Central Bank data, credit to the private sector advanced 1% annually, following a 0.7% rise a month ago, while loans to households increased 1% in the given month from last year, slightly faster than the 0.9% gain in July. At the same time, the annual growth rate of loans to non-financial corporations stood at 0.4% in August, after 0.3% in July. Although more recent figures indicated a solid pick up in lending, the ECB earlier this month said it revised its credit data down based on a new methodology.
Upcoming fundamentals: US consumption expenditures to continue rising
Both US personal spending and income data is due at 12:30 GMT on Monday. The former is estimated to increase by 0.3% on a monthly basis in August, following the same pace of growth one month ago. Incomes are projected to gain 0.4% month-on-month, underlying healthy wage increases and stability of economic recovery in the country. Meanwhile, US pending home sales for August will be released at 14:00 GMT. They are also estimated to come in positive and rise by 0.4%.
EUR/USD fails to close below 200-day SMA
EUR/USD tried to depreciate on Friday as bearish target levels were represented by recent lows around 1.11. However, negative momentum was exhausted by the end of the trading session and the pair bounced back to close above the 200-day SMA at 1.1192. Additional attempts to consolidate below 61.8% Fibonacci retracement of the Jul-Aug uptrend and 100/55-day SMAs are likely to take place soon. A failure here will most probably trigger extra losses down to 1.1087 (Sep 3 low) and 1.1017 (Aug 18-19 lows) afterwards.Daily chart
In the one-hour chart the currency pair keeps trading below the 200-hour SMA, currently at 1.1242. However, this line is quickly heading downwards and therefore is creating additional bearish risks for the single currency.
Hourly chart
Share of bulls decreases from 54% to 53%
Meanwhile, bullish open positions at OANDA decreased even more to 44.28% in the past 72 hours, while SAXO Bank traders are also remaining largely pessimistic with respect to the common currency as their portion of the longs reached 32% by Monday morning.