- SWFX market sentiment is 59% bearish
- Trader set up pending orders are 54% short
- Pair opened Thursday's session at the 1.1158 level
- Aggregate daily technical indicators bet EUR/USD will surge
- Economic events to watch over the next 24 hours: Spanish PMI Manufacturing (Aug); Italian PMI Manufacturing (Aug); French PMI Manufacturing (Aug); German PMI Manufacturing (Aug); EU PMI Manufacturing (Aug); US Initial Jobless Claims (Aug 27); US Unit Labor Costs (Q2); US PMI Manufacturing (Aug); US ISM Manufacturing; Fed's Mester Speaks
Confidence among American shoppers improved unexpectedly in August, according to the Conference Board's monthly survey. The survey's Consumer Confidence Index increased to 101.1 points in the eight month of the year, compared to July's reading of 96.7, while market analysts anticipated a slighter acceleration to 97.1 in the reported month. Nevertheless, back in August 2015, the indicator was higher at 101.4 points. The survey is a closely-followed barometer of consumer attitudes towards business conditions, personal finances, jobs and short-term outlook. The data showed that 30% of respondents stated that business conditions were "good" in August, following July's 27.3%, whereas 18.4% stated conditions were "bad", unchanged from last month. 17.3% of respondents predicted an improvement in the next six months, compared to last month's 15.7%, while 11.1% predicted deterioration, down from July's 12.4%. The share of respondents expecting their incomes to improve remained resilient; however, the outlook on the job market was mixed. Consumer sentiment among Americans remained in the positive territory for more than a year. A reading of 90 or above indicates economic expansion. The US economy is mostly driven by consumer spending, which accounts for about 70% of all economic growth.
The Federal Reserve's (Fed) favorite measure of inflation held steady in the seventh month of the year, official data revealed on Monday. According to the Bureau of Economic Analysis, the Personal Consumption Expenditures Price Index (PCE), excluding the volatile food and energy components, rose 1.6% year-over-year in July, unchanged from last month, while market analysts anticipated a slight decrease to 1.5% in the reported month. On a monthly basis, the core PCE grew 0.1% in July, in line with analysts' expectations and the previous month's reading. The overall PCE advanced 0.8% on a yearly basis in the same month, following June's 0.9% and meeting market forecasts. The data also showed that personal spending climbed 0.3% on a monthly basis in July, down from June's upwardly revised 0.5% gain, whereas personal income jumped 0.4% on the same basis in July, compared to last month's upwardly revised 0.3% hike. Both readings came in line with analysts' projections. Federal Reserve Chairwoman Janet Yellen left the door open for a hike this year during her speech in Wyoming, arguing that the US economy created a lot of jobs lately and it is on a moderate growth path, despite recent disappointing economic data.
Upcoming fundamentals: PMIs and US employment data
With the start of a new month, it is a busy day for the EUR/USD pair, as Markit release the PMI Manufacturing indices for European countries and the US. Moreover, there will be additional data from the US. First of all the PMIs for Manufacturing are incoming form the countries of the European Union, as Spanish data will be out at 7:15 GMT, Italian information at 7:45 GMT, French PMI at 7:50 and the Germans at 7:55. All that data will be combined to form and release the combined PMI Manufacturing for the whole European Union at 8:00 GMT. Afterwards, before the US PMI Manufacturing Index will be released, the US Initial Jobless Claims for the week up to August 27 will be released and they are expected to be at 264,000 at 12:30 GMT. At the same time the Unit Labor Costs will be out for the second quarter and the data will be out as a change in percentage, compared on a quarterly basis. At 13:45 GMT the US PMI Manufacturing will be released for August, and fifteen minutes later, at 14:00 GMT, the ISM Manufacturing index for August will be out. Both of these indices are forecasted to be at 52.0, which indicates at growth of the sector. Last but not least, the working day will end with a speech given by the Fed's Mester at 4:25 GMT.
EUR/USD almost flat at 1.1150 on Thursday morning
Daily chart: The common European currency moved slightly lower on Thursday morning against the US Dollar, as the currency exchange rate still does not manage to find enough support in the cluster below it to rebound. Previously, on Wednesday the currency pair started the day's trading session in the middle of the cluster and fluctuated amidst it until it ended the session at 1.1157, which is just above the 55-day SMA. Due to the combined strength of the support cluster, it is clear that the rate will most likely rebound against it and move to the newly formed monthly pivot point at 1.1190.Daily chart
Hourly chart: The hourly chart for the EUR/USD pair shows that the rate fell on Wednesday until it hit the weekly S1 at 1.1132 at 6:00 GMT. There the rate rebounded and hit the 20-hour SMA at 9:00 GMT at 1.1149. Afterwards, the rate moved back to the weekly S1 once more by 13:00 GMT and rebounded against it. Then the currency exchange pair surged to the 55-hour SMA at 1.1160 by 16:00 GMT, around which it had been struggling since then. It is possible that the rate will fall, as the SMA moves the rate lower back to the weekly S1.
Hourly chart
Trader sentiment remains unchanged on Thursday
OANDA trader bearish sentiment has slightly decreased compared to Wednesday's 54.07%, as, at the moment, 53.98% of OANDA open positions are short. In the meantime, SAXO Bank clients have increased their bearish stance, as their open short positions are now at 61.86% compared to 60.49% of last trading session.