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"Even if we do not share the widespread concerns about dangerous deflationary dynamics, the ECB is miles away from its goal near 2 percent."
- Berenberg Bank (based on Bloomberg)
Pair's Outlook
EUR/USD has been declining constantly since December 25 by losing as many as 400 pips from that time. On Wednesday a drop continued, while the Euro surpassed a support around 1.1870 (2010 low; weekly S2). Even though technical indicators are still giving mixed signals on all time-frames, a further downward movement is very likely. Till the end of the week the pair will most probably reach the point of testing next support at 1.1781, namely the monthly S2.
Traders' Sentiment
Market sentiment on EUR/USD pair remains rather neutral, while longs have decreased their advantage over the shorts, as they reached 53% (57% yesterday). Long pending orders in 100-pip range from the spot plummeted to reach 25% this morning.
© Dukascopy Bank SA