- SWFX market sentiment is 53% bullish
- Trader pending orders are 58% to sell
- Pair opened Tuesday's session at the 1.0998 level
- Aggregate daily technical indicators bet EUR/USD will remain unchanged
- Economic events to watch over the next 24 hours: US CPI
Consumer prices held steady in the Euro zone last month, official figures revealed on Monday. According to Eurostat, the Consumer Price Index came in at 0.4% month-over-month in September, up from the 0.2% rise seen in August. On a yearly basis, the headline CPI came in at 0.4%, unchanged from the prior month and in line with analysts' expectations. The highest inflation annual rate of 1.8% was recorded in Belgium. Meanwhile, the greatest deflation was registered in Bulgaria, where consumer prices dropped 1.1% yearover-year in September. The so-called core CPI, which excludes food, energy, alcohol and tobacco, rose 0.5% month-over-month in September, following the preceding month's 0.3% increase. On an annual basis, core consumer prices advanced 0.8% in the reported month, meeting projections and the prior month's reading. The September growth in consumer prices was mainly supported by restaurants and cafes, rents and tobacco. Since 2013, the European Central Bank aims at inflation rates of below, but close to, 2% over the medium term. After the release, the Euro rose 0.27% against the US Dollar to trade at $1.0998, while Germany's DAX fell 0.44% to 10,533.44 and France's CAC 40 declined 0.34% to 4,456.52.
Industrial production in the United States rose less than expected last month, suggesting the economy grew at a moderate annual pace in the Q3. The Federal Reserve revealed on Monday the country's industrial output advanced 0.1% in September, compared to the preceding month's downwardly revised fall of 0.5%, while market analysts anticipated a rebound of 0.3% in the reported period. On an annual basis, industrial production increased 1.8% in the Q3, marking the first quarterly rise since the Q3 of 2015. Manufacturing output as well as mining output rose 0.2% and 0.4% in September, respectively, while utilities output fell 1.0% in the same month. The industrial sector was badly hurt by the strengthening US Dollar and surging price of oil between June 2014 and December 2015. Also, it was hampered by businesses' efforts to reduce an inventory overhang. However, the recent stabilization of the US Dollar and oil prices suggest a significant rebound in industrial production. In addition, capacity utilization declined to 75.4% during the ninth month of the year, down from last month's 75.5% reading, while economists anticipated a slight increase to 75.6% during the reported period.
Upcoming fundamentals: US CPI data
This Tuesday market participants are set to concentrate on the US CPI data, as the consumer price index data will be published at 12:30 GMT. The CPI data release is set to move the markets and financial instruments, and currency exchange rates, which involve the US Dollar. Although, the US NAHB Housing Market Index and TIC Long-Term Purchases are set to also be released during the day, these data releases are not even likely to impact the strength of the Greenback by 0.1%.
EUR/USD back up above 1.10 on Tuesday
Daily chart: The common European currency moved higher against the Greenback on Tuesday morning, as the currency exchange rate attempted to even break through the resistance put up by the second monthly support level at 1.1026. Previously, the currency pair traded below the 1.10 mark. However, as the outlook seemed unclear, the currency pair rebounded and ended Monday's trading session one pip above the 1.10 level. Due to this rebound, the short term outlook for the pair is a surge for the rest of the week. However, in the long term the rate is still set to fall.Daily chart
Hourly chart: The hourly chart shows a clear short term channel up pattern for the EUR/USD pair. However, amidst the channel the pair has been affected by the 20-hour SMA, which has managed to prep the rate up. Regarding other simple moving averages, the currency pair is ignoring them. Although, this small ascending channel is just a part of a much larger scheme, which was analyzed and published on the website yesterday.
Hourly chart
Traders remain slightly bullish
SWFX traders remain slightly bullish on the pair, as 53% of open positions are long. In the meantime, pending commands remain short, as 58% of set up orders are to sell.
OANDA traders have increased their bullishness on Tuesday, as 60.08% 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 53.07% compared to 51.27% during the previous trading session.