- Pending orders in 100-pip range from the current market price are negative (37% bullish / 63% bearish)
- In case the pair increases in price, the closest resistance for it is located at 1.1857
- The downward movement is possible as well, while for that purpose the closest support is placed at 1.1781
- Upcoming events on January 14: Eurozone Industrial Production, US Core Retail Sales and Crude Oil Inventories
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It is widely expected that the European Central Bank will announce a launch of quantitative easing as early as 21 January, as consumer prices in the currency bloc fell into deflationary territory, preliminary data showed. QE programme is likely to be based on the paid-in capital contributions made by national central banks in the Euro bloc. The level of this contribution would define how much of a country's sovereign debt the ECB would buy.
Germany is the largest contributor, paying 17.9% of the total contributions, while France, the Euro zone's second biggest economy, pays 14.2%. Cyprus, meanwhile, pays the least with 0.15% of the total. The central bank has been considering the QE programme's size of around 500 billion, while analysts are sceptical whether that would be enough to revive the Euro zone's economy.
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Eurozone manufacturing data to be watched on Wednesday
The third day of current week's period is going to start bringing some important statistical data from the single currency area. Among the most influential events, the European Court of Justice is ready to announce a ruling on legality of the European Stability Mechanism, which is assumed as important decision for the future of the project. Moreover, Eurostat will publish data on industrial production in the Eurozone for November, even though no growth in expected, on aggregate.Read More: Fundamental Analysis
EUR/USD sets 2005 low as new long-term goal
The long-term outlook for the EUR/USD currency pair is remaining bearish both in short and long-term. Additionally, the cross has recently managed to reach the lowest point of the previous year at 1.2096, just before it ended on December 31. Moreover, in January the pair continued declining well-below the 1.20 major level. Taking into account the present situation and bearish outlook for the Euro, the pair is likely to drop down to 2005 low at 1.1639 in the medium-term, even though a short-term rebound up to 1.21 is not excluded. Moreover, analysts suggest that in case of Eurozone's QE later this year the single currency may fall further and trade towards 1.10.Daily chart
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On Monday, the EUR/USD currency pair remained broadly unchanged due to lack of impetus on either bullish or bearish side. The cross continued to hover below the major resistance line around 1.1860, represented by the weekly PP and 2010 low. For now it seems that the pair is trying to gain and renew its long-term bearish tendency, meaning that in the foreseeable future we may see the Euro falling down to the monthly S2 at 1.1781. Technical studies on a daily chart, in turn, are also giving negative signals.
Hourly chart
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Opened positions stay bullish at 51%, pending orders stay negative
Meanwhile, pending orders to acquire the single currency versus the US dollar are remaining bearish, even though volatility from day to day is rather high, as longs have only 37% at the moment (47% yesterday). It implies that, in case the pair increases in price, in the medium-term bearish pressure may stop the pair from climbing further around the 2010 low at 1.1939.
On the other hand, if the Euro declines, the losses may potentially extend down to weekly S1 at 1.1737 in the foreseeable future.
Spreads (avg,pip) / Trading volume / Volatility
Community expects Euro to fall further against US dollar
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Jignesh, one of the community members participating in the survey, motivates his bearish outlook towards the common currency by saying that the EUR/USD currency pair has recently managed to break a number of important support lines, including a monthly trend-line and 1.20 major level. He also adds that the "we may see a bit of a pull back to start the week but selling pressure should be strong."
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Dec 13 and Jan 13 expect, on average, to see the currency pair around 1.2150 by the end of April. Though only the minority of participants, namely 16% of them, believe the exchange rate will drop down to the 1.22/1.20 region in ninety days. On top of that, the 45% of those surveyed reckon the price will trade below 1.20 by the end of April of this year.
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