- Market participants buy the Euro in 52% of all cases
- 54% of pending orders in 100-pip price range are set to acquire EUR/USD
- Bears to focus on the 1.08 area; is going to meet May/July lows and weekly S1
- Daily technical indicators support the pair's sell-off at the moment
- Economic events to watch in the next 24 hours: Euro zone Retail Sales (Sep); European Commission Release Economic Growth Forecasts; ECB President Draghi Speaks; US Unemployment Claims (Oct 30) and Non-Farm Productivity (Q3); FOMC Members Dudley, Fischer and Lockhart Speak
Activity in the Euro area's services sector remained on a strong footing at the start of the final quarter of 2015, according to final surveys of purchasing managers. The bloc's services PMI maintained healthy expansion, with the final reading booking 54.1 points in October, up from 53.7 points in the preceding month. The preliminary print came in at 54.2. The Markit report also pointed out that the activity in the given sector across the Euroland edged higher mostly on account of improved levels of new business and increased employment. New orders expanded at the fastest pace since July, while the pace of job creation rose to one of its quickest during the past four-and-a-half years. At the same time, average prices charged for services in the Euro zone dropped slightly during October, while the input costs rose moderately.
Meanwhile, the ECB President Mario Draghi in his speech at the ECB Forum on Banking Supervision in Frankfurt summed up the performance and prospects of the single supervisory mechanism, which has now been running for a year. Draghi also urged policy makers to complete the integration of the European banking sector with Europe-wide mechanisms for insuring customer deposits and winding up failed banks, adding that the reforms are a prerequisite for financial stability.
Upcoming fundamentals: EU Commission to publish new economic expectations today
The report, which will be published by the European Commission on Thursday, includes forecasts for economy of the European Union over the next two years. On top of that, it covers more than 180 different variables. The release is due at 10:00 GMT. Meanwhile, retail sales in the Euro area are forecasted to grow by 0.2% in September after no change in August. Three members of the Federal Open Market Committee are going to deliver speeches today. We consider the speech from Atlanta Fed President Dennis Lockhart as the most important one, because audience questions are expected after he talks at Joint Central Bank Conference in Bern, Switzerland.
EUR/USD crossed 1.09 to expose 1.08
The Euro continued to weaken further versus the US Dollar on Wednesday. EUR/USD pierced through 1.09 yesterday, while the weekly S1 failed to sustain losses of this currency pair. Now bears are aiming at May and July lows at 1.0819/08, which are immediately followed by weekly S2 and monthly S1 at 1.0799/68. There a decline of the Euro can be suspended in the near term, while traders are waiting for US employment data on Friday. More pronounced moves of the cross will therefore be expected to take place tomorrow.Daily chart
Better than expected data from America may encourage bears for purchases of the US Dollar at the expense of the Euro. In the medium term a decline may prolong down to 1.0740, judging by current location of trend-lines in the one-hour chart. Additional supply is coming from the 200-hour SMA, currently at 1.0993.
Hourly chart
SWFX sentiment and pending orders are bullish today
Meanwhile, 53% (55% yesterday) of SAXO Bank clients still expect EUR/USD to lose value. However, OANDA long traders are keeping 55% of all open trades and preserve their majority over bears at the moment.
Spreads (avg,pip) / Trading volume / Volatility
Community members forecast the Euro to lose value against the US Dollar this week
According to Dukascopy Community members, the most traded currency pair will prolong its bearish tendency throughout this week. This idea is supported by the 61% of Dukascopy traders.
"After dropping below the weekly uptrend line, it is expected that pair will continue it downward trend. If it will break above 1.11 level on the daily chart, then, the pair will resume recent uptrend, and will try to reach recent resistance which is at 1.14" - said trader Drishti.