- Commands to buy the Euro versus the US Dollar in 100-pip range changed to neutral (50% bullish / 50% bearish)
- At the moment, the closest resistance for the pair is located at 1.1440
- In case of development to the south, the closest support is currently placed at 1.1366
- Upcoming events on February 17: Italy Trade Balance (Dec), Germany and Eurozone ZEW Economic Sentiment (Feb)
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Growth in Germany accelerated in the final quarter of the year, benefiting from falling oil prices and a weaker Euro. Economic output in the Euro zone powerhouse rose 0.7% in the three months through December, following a modest growth of 0.1% in the third quarter of 2014. On a yearly and non-seasonally adjusted basis, GDP grew 1.6%, overshooting analysts' expectations, and better than the previous quarter's 1.2% advance.
However, France, the Euro zone's second biggest economy, grew just 0.1% in the final quarter, hampering the overall currency's bloc economic expansion. On an annual basis, France's GDP ticked up 0.2%, below analysts' estimates of 0.3%, and compared with the previous quarter's 0.4% growth. The Euro zone, meanwhile, posted a 0.3% quarterly GDP growth, while the region's economy expanded at a 0.9% pace from the previous year.
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Data from Europe to influence common currency the most on Tuesday
On Tuesday of the new week, only some statistical data is going to be released in Europe, while US side is expected to remain silent in terms of data's importance. Italy will publish its trade balance numbers for December. Moreover, the ZEW Institute is due to reveal economic sentiment for both Germany and the Eurozone, which is considered to be an important indicator for investors' sentiment in the region.Read 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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During Feb 9-13 time period, the EUR/USD cross registered a third consecutive weekly increase in its value. At the same time, on Friday the pair declined slightly, as 20-day SMA used to be a strong enough resistance to push the single currency back below 1.14. Right now EUR/USD is trading around this round level, while during Monday it has a chance to increase towards weekly R1 at 1.1463, but in the medium-term this level is likely to send the pair downwards.
Hourly chart
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Read More: Technical Analysis
Pending orders on EUR/USD become neutral, opened positions remain bearish
On the other hand, SWFX commands to acquire the Euro in 100-pip range from the current market price changed to stay absolutely neutral in the morning on Monday, while bulls lost their advantage of net 14% that was gained in the end of last week. It proclaims that the pair is likely to trade mostly sideways in the medium-term, just in between weekly PP and R1 around 1.14.
Spreads (avg,pip) / Trading volume / Volatility
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Jan 16 and Feb 16 expect, on average, to see the currency pair around 1.13 by the end of May. Though the majority of participants, namely 55% of them, believe the exchange rate will drop down even more below 1.12 in ninety days, with 28% alone seeing it below 1.08. Alongside, 20% of those surveyed reckon the price will trade in the range between 1.12 and 1.18 by the end of May of this year.
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