- Market sentiment remains moderately bullish (54%)
- Share of long pending orders in 100-pip range is also stable at 36%
- Bulls rely on support from 1.1154/24 area
- Bears are setting eyes on Aug 18-19 lows at 1.1015
- Economic events to watch in the next 24 hours: German Bundesbank President Jens Weidmann Speaks; Euro zone M3 Money Supply (Aug); US Final GDP (Q2) and Services PMI (Sep)
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German business morale unexpectedly improved in September, as companies benefited from strengthening domestic demand in Europe's largest economy, shrugging off risks from slowing growth in emerging markets. However, the survey was made before the pollution cheating scandal at Wolfsburg-based car maker Volkswagen. The sentiment gauge climbed to 108.5 in the reported period from a revised 108.4 in August. In the meantime, another data release from Germany showed consumer optimism falling for the fourth month in a row in September. The indicator dropped to 9.6 points over the given period, compared with 9.9 points in August.
At the same time, the data release from Italy revealed that retail sales in the Euro area's third largest economy accelerated their pace of growth and left negative territory in July. According to the Istat, consumer spending at retailers ticked 0.4% higher in the seventh month of the year on a monthly basis, following a 0.4% decline in June.
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Upcoming fundamentals: ECB's Weidmann to speak in Italy on Friday
At 7:00 GMT on Friday markets expect to hear from the Deutsche Bundesbank President Jens Weidmann. He is going to address the Young Factor Conference in Florence, Italy. Moreover, later at 15:30 GMT he will hold a press conference. Economists are waiting for any hints, whether Bundesbank President suggests the ECB's QE programme should be extended in time or expanded in volume. In the meantime, the Euro zone's money supply data is due at 8:00 GMT on Friday as analysts foresee the indicator to register solid annual growth of 5.4% in August, up from 5.3% in the preceding month.
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EUR/USD retreats after approaching 1.13 yesterday
Bulls were successful in pushing the EUR/USD up to 1.13 on Thursday as they managed to breach both monthly pivot point and 50% Fibonacci retracement of the Jul-Aug uptrend. However, fundamentals in face of Janet Yellen's speech were favouring an appreciation of the Dollar. As a result, the pair dipped considerably and now it is nearing the 1.1154 (61.8% retracement) mark. In case the 55-day SMA at 1.1124 is violated, the Aug 18-19 lows at 1.1015 will be back in the picture. Meanwhile, at the moment daily indicators are also giving bearish signals.Daily chart
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Despite testing the 200-hour SMA yesterday, the cross failed eventually and allowed losses to extend down to 1.1150 by Friday morning. This area is guarded by the 61.8% retracement, while a slip below this level will expose the most recent lows at 1.1105 (Sep 23).
Hourly chart
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Read More: Technical Analysis
Bulls hold gains as their share is stable at 54%
Meanwhile, bullish open positions at OANDA dropped back below the 50% mark to reach 45.18% on Friday. Alongside, SAXO Bank traders are also remaining largely pessimistic with respect to the common currency as their portion of the longs fell further from 35% to 33% in the past 24 hours.
Spreads (avg,pip) / Trading volume / Volatility
Community members forecast the Euro to grow against the US Dollar this week
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On a weekly basis, the sentiment among Dukascopy Community members on this currency pair remains the same, as still only 42% of traders predict the Euro to decline.
Read More: Community Forecasts
Among traders, csan86 says that "this pair is still moving in a descending triangle. It tried to break out from this pattern on Thursday, but the price was changed by the 1.1450 resistance level again." He suggests that "this pair is still bullish" and he expects "an another breakout attempt this week."
Average forecast says EUR/USD will trade at 1.13 by December
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Aug 25 and Sep 25 expect, on average, to see the currency pair around 1.13 by the end of December. Though the majority of participants, namely 53% of them, believe the exchange rate will be generally below the 1.14 mark in ninety days, with 39% alone seeing it below 1.10. Alongside, only 25% of those surveyed reckon the price will trade in the range between 1.14 and 1.20 by the end of December of this year. © Dukascopy Bank SA