- Pending orders in 100-pip range from the current market price are negative (47% bullish / 53% bearish)
- In case the pair increases in price, the closest resistance for it is located at 1.2228
- The downward movement is possible as well, while for that purpose the closest support is placed at 1.2107
- No major events are expected to take place until December 30
© Dukascopy Bank SA
Italy's retail sales remained stagnant in October, posting a flat 0.0% growth on month, according to Istat, after being stagnant in September. On an annual basis, sales in Italian stores dropped 0.8%, compared with a revised 0.6% decline in retail business in the preceding month. Istat also confirmed that the Italy's economy remained in a weak economic situation in the September quarter after a dire performance in the first half of the year. GDP fell 0.1% in the three months through September, while on annual basis the Euro zone's third-biggest economy booked negative 0.5% GDP growth during the reported period, following a 0.4% drop in the previous three months.
However, final GDP data for France showed that the Euro area's second largest economy returned to growth in the third, according to the National Institute for Statistics and Economic Studies. Economic output in France recorded a 0.3% growth in the three-month period ending September, after posting 0.1% deterioration in the second quarter.
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EUR/USD to trade in the direction of 1.20
As the long-term outlook for the EUR/USD currency pair has been remaining bearish for the last couple of weeks, the cross managed to reach a new minimum of this year at 1.2163 on December 23. At the moment it is also trading below the long-term downtrend line, even though two weeks ago the pair traded above it and was showing bullish signs. Taking into account the present situation, the pair is likely to decline even more down to the 2012 low at 1.2040 in the long-term and move in the direction of the major level at 1.20. On the other hand, there is a possibility of a rebound up to 1.23, before the leadership is finally overtaken by pair's bears.Daily chart
© Dukascopy Bank SA
Due to Christmas period, the previous trading day was Wednesday. On that day the EUR/USD cross was little changed because of holidays, when the trading volume is rather low. The pair went up slightly to reach the monthly S2 at 1.2228. But this level kept bullish pressure under control. We do not see the Euro climbing above this level and expect it to decline in the medium-term. The new yearly low under 1.2162, however, is not likely to be set until December 31.
Hourly chart
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Long positions down to 54%, pending orders remain bearish
Additionally, long pending orders in 100-pip range from the current market price advanced to 47%, the highest level in a week. It implies that, in case the pair increases, in the medium-term the pair can be stopped by the monthly S1/weekly PP at 1.2338.
On the other hand, if the pair declines, the bearish pressure may extend down to the monthly S3, which is located at 1.2098.
Spreads (avg,pip) / Trading volume / Volatility
Community expects Euro to rebound against Greenback
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Panzer, one of the community members participating in the survey, motivates his bullish outlook towards the common currency by saying that the EUR/USD currency pair going test the long-term positive trend which started back in June 2011 with the price of 1.22. He also adds that he does not see "any reason for the decline in the pair, this is a strong level for strong rejection."
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Nov 26 and Dec 26 expect, on average, to see the currency pair around 1.2350 by the mid-March. Though the largest portion of participants, namely 26% of them, believe the exchange rate will drop down to the 1.22/1.20 region in ninety days. On top of that, the 28% of those surveyed reckon the price will fall below 1.20 by the end of the first quarter of the next year.
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