- SWFX market sentiment is 63% bearish
- Trader set up pending orders are 51% to buy
- Pair opened Friday's session at the 1.1258 level
- Aggregate daily technical indicators bet EUR/USD will surge
- Economic events to watch over the next 24 hours: Fed's Rosengren Speech; US Wholesale Inventories (July);
Yesterday, on Thursday September 8, the European Central Bank decided to left interest rates in the single currency area unchanged, but being open for more cuts in the upcoming months and renewed calls to politicians to apply more stimulus for the economic recovery. A s a result, the ECB held the single currency area's main interest rate at zero. Also, the European Central Bank left its 1.7 trillion euro stimulus programme unchanged, brushing off concerns over economic shock waves from Britain's decision to leave the European Union. However, the ECB president Mario Draghi noted that uncertainty over the Brexit was among the factors dampening the Euro zone's growth and he unveiled a slightly weaker economic outlook for the bloc. Although, the ECB did not even discuss extending its 80 billion (per month) asset purchase programme, as president Mario Draghi noted "not so substantial to warrant a decision to act". The ECB President Mario Draghi also stayed that he is concerned over persistently low Euro zone inflation, which has fallen short of the ECB's near-2% target for more than three years. According to the fresh ECB staff forecasts, inflation rising very gradually, to 1.2% next year and 1.6% in 2018..
The number of Americans filing for unemployment benefits dropped unexpectedly last week, official data revealed on Thursday. According to the Labor Department, initial jobless claims fell 4,000 to a seasonally adjusted 259,000 in the week ended September 3, touching the lowest level since mid-July and following the preceding week's reading of 263,000. Market analysts anticipated a slight increase to 264,000 filings in the reported period. Last week's numbers market the 79th consecutive week of initial jobless claims remaining below the 300,000 level, the longest streak since 1973. There were no special factors influencing last week's claims data; however, jobless claims for Virginia, New Mexico, Alabama, Minnesota, Hawaii and Puerto Rico were estimated amid the Labor Day celebrated on Monday. Furthermore, the four-week moving average of initial jobless claims, considered a better measure of labor market trends, declined 1,750 to 261,250 during the same week. Meanwhile, the number of continuing jobless claims dropped 7,000 to 2.14 million in the week ending August 27, whereas the four-week moving average of continuing claims decreased 4,000 to 2.15 million. The claims data together with the latest JOLTS report suggest that the trend in employment growth remains strong.
Upcoming fundamentals: Fed speech and US Wholesale Inventories
In the aftermath of the ECB rate announcement, there was only one notable data publication from the EU, as the German current account and trade balance were published at 6:00 GMT. However, later in the day there will be two notable events in the US. The Fed's Rosengren will give a speech at 11:45 GMT, and the speech might give hints at the future decisions of the Fed. At 14:00 GMT the US Wholesale Inventories monthly change for July will be released.
EUR/USD approaches 1.13 on Friday
Daily chart: The common European currency appreciated against the US Dollar on early Friday morning. However, the surge up to 1.1280 by 5:15 GMT is only a slight jump, compared to the level of 1.1326 touched during Thursday's trading session. Although, the volatility was cause by the ECB rate announcement and the following press conference. During Friday's trading session the rate has set its eyes once more to the resistance cluster starting above at 1.1305, where the second weekly resistance is located at.Daily chart
Hourly chart: The hourly chart for the EUR/USD pair shows that the common European currency was surging slowly on Thursday morning, as it peaked on the ECB rate announcement around 12:00 GMT at 1.1326. Afterwards, the currency exchange rate declined and fell to the 55-hour SMA at 1.1245 by 16:00 GMT. Since then the rate has been slowly surging, as the SMAs push it northwards to the 1.1305 level, where the second weekly resistance resides.
Hourly chart
SWFX bearish sentiment increases
OANDA trader bearish sentiment has increased compared to Thursday's 56.42%, as, at the moment, 59.26% 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 69.43% compared to 68.12% of last trading session.