- Advantage of bulls is minimal on Thursday morning (51%)
- Pending orders are still equally divided between traders
- 55-day SMA to cross 100-day moving average in the nearest future
- Daily technical indicators project losses for the Euro
- Economic events to watch in the next 24 hours: Spanish, Italian, French, German and Euro zone Manufacturing PMI (Sep); US ISM Manufacturing PMI (Sep); Unemployment Claims (Sep 25) and Total Vehicle Sales (Sep); FOMC Member Williams Speaks
The 19-nation Euro area's unemployment rate was 11.0% in August 2015, unchanged from July's reading. However, the measure missed expectations, as the market forecasted a rate of 10.9%. The worst employment situation in the Euro zone was recorded in Greece, whereas Germany had the best one. The jobless rate of the EU's largest economy remained unchanged at 6.4% in the reported month. However, unemployment data revealed a surprising increase of 2,000 new unemployed in September, while analysts predicted a drop of 5,000. Meanwhile, German retail sales added to disappointment In Europe's number one economy, as private consumption unexpectedly fell in August. According to Destatis, retail turnover fell 0.4% in real terms month-on-month, well down from a 1.4% gain recorded in the previous month.
In regards to consumer prices across the Euro zone, they dropped 0.1% year-on-year in September after an increase of 0.2% in August, while markets expected to see the gauge flat in the reported month. This was the weakest number since March when consumer prices also fell by 0.1%. September's decline in consumer prices was primarily driven by a renewed drop in crude oil prices that tumbled 8.9% annually after a fall of 7.2% in August.
Upcoming fundamentals: PMI numbers from Euro area, FOMC's Williams speech
September production PMI numbers for all major European countries are estimated to be confirmed above 50 points threshold today. Spain will kick off the data flow at 7:15 GMT, while the pan-Euro zone reading is due at 8:00 GMT. The latter is estimated to remain flat at 52 points. Meanwhile, the San Francisco Fed President John Williams will speak about the US economic outlook in Salt Lake City on Thursday at 18:30 GMT. Audience questions are expected.
EUR/USD ready to violate 100/55-day SMAs
Yesterday EUR/USD failed at the 50% Fibonacci retracement of the Jul-Aug uptrend around 1.1260. The pair has therefore slumped down to the 200-day SMA 1.1170, while a decline is continuing on Thursday. Penetration of both 100 and 55-day SMA can be expected, taking into consideration bearish daily technical indicators. Meanwhile, very soon we are going to observe all 55, 100 and 200-day SMA crossing each other. The 55-day SMA is already testing the 100-day SMA to the upside, which implies a change in sentiment towards more positive momentum in overall development of EUR/USD.Daily chart
By showing a considerable loss on Wednesday, the EUR/USD pair has also crossed the 200-hour SMA in the one-hour chart. This event is going to refocus our attention on lower levels. In case the 1.11 mark is breached, bears will then aim at Aug 18-19 lows around 1.1015.
Hourly chart
Share of bulls is down to 51%, pending orders remain neutral
Meanwhile, bullish open positions at OANDA surged to 46% (41% yesterday), while SAXO Bank traders are also remaining largely pessimistic with respect to the common currency as their portion of the longs stays at 36% today, up from 30% seen 24 hours ago.
Spreads (avg,pip) / Trading volume / Volatility
Community members forecast the Euro to grow against the US Dollar this week
On a weekly basis, the sentiment has improved significantly, as almost 63% of participants in our weekly quiz expect the Euro to rebound versus the Greenback.
Among traders, khalidamassi suggests says that "EUR/USD was supported last week around 1.11 as it recovered slightly towards 1.12, so 1.11 will be the minor support this week, which may send the pair towards 1.14 if US employment is not good. But the new surge in US employment or lower unemployment rate should give a boost for USD, especially after Yellen's last speech about raising rates before year-end."