- SWFX market sentiment is 51% bullish
- Pending commands in the 100-pip range 70% short
- Pair opened Friday's session at the 1.1059 level
- Aggregate daily technical indicators bet EUR/USD will depreciate
- Economic events to watch over the next 24 hours: US Change in Nonfarm Payrolls (June); US Unemployment Rate (June);
Factory orders in Germany posted no improvement in May when measured on a monthly seasonally adjusted basis. According to the latest report from the German statistical office Destatis, factory orders in the Euro zone's largest economy kept unchanged in the fifth month of 2016, when they fell a revised 1.9%. Economists had predicted a 1% rise in the data, which is typically volatile. On a yearly basis, the gauge decreased by 0.2% in the reported month, after posting a 0.4% decline in the previous month, measured on a nonseasonally adjusted basis. Markets had projected growth of 0.9% year-on-year in May. Meanwhile, according to the report, domestic orders decreased by 1.9%, while foreign orders increased by 1.4% on the previous month. New orders from the euro area were up 4.0% on the previous month, while new orders from other countries decreased by 0.3% compared to April 2016. There are growing signs that, after a good start to the year, Germany's economy will at best have achieved only modest growth in the second quarter. The sideways trend in manufacturing points to it too, making only slight advances in the coming quarters. Moreover, the British vote in June, in which the nation opted to quit the EU, could further weaken the German economy.
An important indicator of the euro area's economic health stayed unchanged in June. The 19-country Markit Composite PMI, a forward-looking indicator tracking development in the euro area's manufacturing and services sectors, was unchanged at 53.1 points during the sixth month of the year, same as in May, when it rebounded from a 15-month trough. Meanwhile, conditions in the euro-zone services sector eased as the gauge tracking development in the area booked 52.8 points, down from 53.3 snatched in May. A level below 50.0 signals a deterioration from the previous month, while above 50.0 signals an increase. Among major euro area countries, France was once again the weakest performer, with PMIs pointing to a contraction in economic output. Indicators for Germany, Italy and Spain pointed to solid expansion. Data overall signaled a continued pick-up in employment, with job growth accelerating to a five-year high. Meanwhile, a separate report from Eurostat showed that retail sales in the euro zone came in the green both on the monthly and annual basis in May, after the flat reading seen a month before. Retail sales rose by 0.4% in May, after a 0.2% increase in April. This brought the annual rate of increase up from 1.4% to 1.6% in May.
Upcoming fundamentals: US employment data for June
It is quiet Friday for the common European currency against the US Dollar, as the only notable data releases, which could affect the pair are two US employment statistics. First is the Change in Nonfarm Payrolls, which is forecasted to be around 180,000, and second is the US Unemployment Rate, which is expected to increase this month by 0.1% to 4.8%. Both will be released simultaneously at 12:30 GMT.
EUR/USD drops to 1.1059 on Thursday
Daily chart: The European common currency depreciated against the US Dollar on Thursday, as it opened day's trading session at 1.1100 and ended the session at 1.1062. By doing that the currency exchange rate dropped once again below the support at 1.1092 made up of the weekly PP and 200-day SMA. At the moment, the currency exchange rate is once again moving up to face the same level, with which it has struggled for the past seven trading sessions. However, daily aggregate technical indicators forecast a depreciation for the EUR/USD pair today.Daily chart
Hourly chart: The hourly chart shows that the Euro struggled two times during Thursday's trading session to break the resistance put up by the weekly PP and 200-hour SMA at 1.1092. However, the pair dropped after the second attempt and fell until midnight. Starting Friday the currency exchange rate has been surging and it is once again closing in on the previously mentioned resistance.
Hourly chart
SWFX traders bullish on Friday
OANDA trader bearish sentiment has decreased compared to Friday's 62.08%, as, at the moment, 60.49% of OANDA open positions are short. In addition, SAXO Bank clients have decreased their bearish stance, as their open short positions are now at 56.38% compared to 59.39% of last trading session.