- SWFX market sentiment is 53% bullish
- Trader pending orders are 59% to sell
- Pair opened Friday's session at the 1.1055 level
- Aggregate daily technical indicators bet EUR/USD will remain unchanged
- Economic events to watch over the next 24 hours: US Retail Sales; US PPI; FOMC Member Rosengren Speaks; US Prelim UoM Consumer Sentiment; Fed Charwoman Yellen Speaks
The number of Americans guling for unemployment beneguts remained at its 43-year low last week, official gugures showed on Thursday. According to the US Department of Labor, initial jobless claims held at a seasonally adjusted 246,000 in the week ended October 8, while market analysts anticipated a slight increase to 252,000 during the reported period. Meanwhile, the preceding week's gugure was revised down to 246,000 from the originally reported reading of 249,000. It was the 84th consecutive week of initial claims remaining below the 300,000 level, the longest streak since 1973. The four-moving average of claims, considered a better measure of labor market trends, declined 3,500 to 249,250 last week, the lowest level since November 1973. The data also showed the number of continuing claims decreased 16,000 to 2.05 million in the week ending October 1, the lowest level since June 2000, while its four-week moving average fell 25,750 to 2.07 million. In a separate report, the Department of Labor said import prices rose 0.1% month-over-month in September, following August's 0.2% drop and meeting analysts' expectations. On an annual basis, import prices declined 1.1% in the same month, compared to the previous month's 2.2% fall.
Industry gouges for the single currency area could bring third quarter economic growth in the 19-country Euro zone. According to the data, the Eurozone's industrial production went up 1.6% in August following a revised 0.7% decrease during the previous month. Moreover, the increase outperformed expectations of a 1.4% rise and the annual advance of 1.8% was also above consensus forecasts. Although, the solid recovery has demonstrated German production for August with output rising 2.5% on a monthly pace, while new orders also strengthened and there was a robust recovery in exports. Overall the jump in production is unlikely to remove concerns among policy makers over the impact of Brexit on the Euro zone economy. Although, it may take many months to translate currency fluctuations to canceled or reduced export orders, while the markets are preparing for the busy Christmas shopping period. The industrial gouges also have a tendency to be volatile, thus economists are careful not to read too much into one month's data. Also, many economists supposes that the outlook for the sector remains problematic.
Upcoming fundamentals: US Retail Sales and Yellen's speech
The EUR/USD pair's strength on Friday will be dictated by events occurring in the US, as only minor EU data in the form of the EU trade balance will be out at 9:00 GMT. The first notable time to watch the markets will be 12:30 GMT. At that time the US Retail Sales data and US PPI will be released. Moreover, at the same time FOMC Member Rosengren will give a speech. Afterwards, at 14:00 GMT the Preliminary UoM Consumer Sentiment will be released. However, those events might as well be ignored, as the most important information will be said by Janet Yellen at 17:30 GMT, as she is set to give a speech.
EUR/USD trades higher after a rebound
Daily chart: The common European currency depreciated against the Greenback on early Friday morning, as the currency exchange rate had dropped below the support provided by the weekly S2 at 1.1043. Previously, on Thursday the currency pair retreated to the third weekly support at 1.0981, and it rebounded before even touching it. In the aftermath the Euro began to climb and recoup some of its previous losses against the US Dollar, as the rate ended Thursday's trading session at 1.1055. Due to the fact that the rate rebounded at a possible trend line of a channel down pattern, it might be positioned for a surge.Daily chart
Hourly chart: On the hourly chart for the EUR/USD currency exchange rate it can be seen that the rate found support and rebounded at 9:00 GMT on Thursday. Afterwards, the pair moved through the weekly and monthly S2s with some delay, but mostly unopposed, as all the SMA's and Bollinger bands in the range from 1.10 to 1.1050 were too weak to affect the rate. However, most recently there has been a reversal, as the pair has begun to fall back.
Hourly chart
Traders remain bullish
Traders remain slightly bullish on the pair, as 53% of open positions are long. In the meantime, pending commands are 59% to sell the Euro.
OANDA traders have decreased their bullishness on Friday, as 56.83% of open EUR/USD positions are long. In the meantime, SAXO Bank clients remain bearish. However, the bearishness is higher than previously, as open short positions now add up to 54.10% compared to 51.48% during the previous trading session.