- Commands to buy the Euro versus the US Dollar in 100-pip range changed to the positive side (57% bullish / 43% bearish)
- At the moment, the closest resistance for the pair is located at 1.1467
- In case of development to the south, the closest support is currently placed at 1.1378
- No major news in Europe and US are expected to be published during February 14-16 time period
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While Greece is within a hair's breadth of a massive default and European finance leaders are trying to avert the worst-case scenario, the unemployment rate in Greece remained at an unhealthy high level. The jobless rate was 25.8% in November, unchanged for the preceding month. One of the pre-election pledges of Alexis Tsipras, Greece's Prime Minister, is to implement labour market reforms, which include restoring wages, reinstating pensions and ending layoffs. The minimum wage will gradually increase to 751 euros a month from 586 euros now.
Meanwhile, an unexpected move came from the other side of Europe, where the Swedish Riksbank cut interest rate and deployed quantitative easing to combat deflation. The central bank cut its main repo rate by 10 basis points to –0.1%. On top of that, the bank announced it will buy SEK10 billion ($1.2 billion) worth of government bonds, to further ease monetary policy.
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EUR/USD set to weaken in the long-term
The long-term outlook for the EUR/USD currency pair is remaining bearish. On January 22, the ECB has made a long-awaited decision to expand its asset purchases which will continue pushing the Euro to the downside. Moreover, the lowest point since the year 2003 around 1.1113 has already been hit by EUR/USD cross. Taking into account present monetary conditions and bearish outlook for the Euro, the pair has a chance to go below 1.10 towards the end of the first quarter of this year. Short-term bullish actions may take place, but their impact and size are not expected to be appropriate for the common currency to commence a stable recovery in the long-run. Moreover, some market participants suggest it may fall further and even trade towards the parity in course of this yearRead More: Fundamental Analysis
EUR/USD set to weaken in the long-term
The long-term outlook for the EUR/USD currency pair is remaining bearish. On January 22, the ECB has made a long-awaited decision to expand its asset purchases which will continue pushing the Euro to the downside. Moreover, the lowest point since the year 2003 around 1.1113 has already been hit by EUR/USD cross. Taking into account present monetary conditions and bearish outlook for the Euro, the pair has a chance to go below 1.10 towards the end of the first quarter of this year. Short-term bullish actions may take place, but their impact and size are not expected to be appropriate for the common currency to commence a stable recovery in the long-run. Moreover, some market participants suggest it may fall further and even trade towards the parity in course of this year.Daily chart
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Eventually, the EUR/USD cross managed to gain bullish momentum and grow notably on Thursday, supported by a round level at 1.13. As a result, the most traded currency pair breached the closest resistance at 1.1379 (weekly PP) and went even further to the north. Despite that, a correction is likely to take place soon, being that there is only a little chance of the Euro going above a cluster of supply levels around 1.15.
Hourly chart
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Read More: Technical Analysis
Pending orders on EUR/USD surge above 50%, opened positions remain bearish
On the other hand, SWFX commands to acquire the Euro in 100-pip range from the current market price strengthened further during past 24 hours and even surpassed the 50% threshold, reaching the 57% mark on Friday. This number of buy orders is the highest in six weeks right now. It proclaims that in case of pair's increase in price, its medium-term gains are likely to be extended up to the 2005 low at 1.1639.
On the other hand, a potential decline of the Euro is likely to be limited by the Bollinger band, currently placed at 1.1225.
Spreads (avg,pip) / Trading volume / Volatility
Community is waiting for the Euro to decline by February 14
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Read More: Community Forecasts
massimoscalas, one of the community members participating in the survey, motivates his bearish outlook towards the common currency by saying that "if the price breaks 1.13 back to 1.1209 and from there to a minimum of the year, at this point the Euro will be under pressure and a new break could send him to the next support." He also supposed that there are several external risks presently: "There are two geopolitical reasons: Greece and Ukraine. There's a macroeconomic reason as well: US yields rise.".
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Jan 13 and Feb 13 expect, on average, to see the currency pair around 1.13 by the end of May. Though the majority of participants, namely 57% of them, believe the exchange rate will drop down even below 1.12 in ninety days, with 27% alone seeing it below 1.08. Alongside, 16% of those surveyed reckon the price will trade in the range between 1.14 and 1.20 by the end of May of this year.
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