- SWFX market sentiment is 54% bullish
- Trader pending orders are 57% to sell
- Pair opened Thursday's session at the 1.1005 level
- Aggregate daily technical indicators bet EUR/USD will remain unchanged
- Economic events to watch over the next 24 hours: US Unemployment Claims; US Import Prices
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.
On Wednesday the Fed released the minutes of its September meeting, once again refraining from raising interest rates. Several FOMC members expressed desire to raise rates, while others stated that a rate hike would be required 'relatively soon'. It was the gurst time in guve years when more than two officials voted for an immediate rate hike. Some Fed policy makers still have concerns over the strength of the labor market and inflation, thus, more evide of US economic growth is required. Inflation has been below the Fed's 2% target, namely at 1.7%, but it was still argued that the levels are quite close to expectations and there are few signs of inflationary pressures. Some argue that the Fed was somewhat hawkish, but these minutes had little impact on the markets, as they brought more uncertainty, not necessarily suggesting a rate hike will occur in December, despite Fed Chair Jannet Yellen and several other officials stating that they would raise rates by year's end if inflation and employment gugures keep improving. Although there are two more Fed meetings scheduled in 2016, a move in November has been basically ruled out due to US presidential elections. According to CME Group's data, a December rate hike is currently seen with a probability of slightly more than 60%.
Upcoming fundamentals: US Unemployment Claims and Import Prices
During today's trading session traders have to keep their eyes open for the US Unemployment Claims and Import Prices at 12:30 GMT. From the both data releases the employment data is considered to historically provide more volatility to financial instruments and exchange rates, which are denominated in US Dollars.
EUR/USD stopped by trend line on Thursday
Daily chart: The common European currency slightly rebounded against the US Dollar on Thursday morning, as the currency exchange rate encountered the support of a channel down pattern. Previously, the currency pair moved through a support cluster comprised of the weekly and monthly S2s at 1.1043 and 1.1026. Moreover, the lower Bollinger band has been being bent for the past sessions. As at the moment the previous support cluster is providing resistance, it is most unlikely that the currency exchange rate will surge. Nevertheless, the Euro attempted to regain some of the losses and break through the resistance.Daily chart
Hourly chart: The hourly chart for EUR/USD reveals that, as the rate fell below the two S2s at 9:00 GMT, it found support in the channel down pattern's lower trend line. Since then the rate has been attempting to pass the resistance put up by the weekly and monthly second support levels, and it failed at it.
Hourly chart
Traders become bullish
Traders have picked a side and become bullish, as 54% of open positions are long on Thursday. In the meantime, pending commands remain short, as 57% of set up orders are to sell.
OANDA traders have increased their bullishness on Thursday, as 60.34% of open EUR/USD positions are long. In the meantime, SAXO Bank clients remain bearish. However, the bearishness is lower than previously, as open short positions now add up to 51.48% compared to 53.24% during the previous trading session.