- Commands to buy the Euro versus the US Dollar in 100-pip range from the spot are bearish (40% long / 60% short)
- The closest resistance for this pair is located at 1.1126
- At the same time, the closest support is currently placed at 1.1097
- Upcoming events on June 9: Euro zone Revised GDP (Q1)
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German factory orders rose for a second month in a row in April, the Economics Ministry said. Factory orders increased by 1.4%, three times as much as economists had expected for the month and marking the strongest monthly gain in half a year. The robust performance in April was attributable to a 5.5% increase in orders from abroad. Demand in other Euro zone nations was particularly strong, increasing by 6.8% in April in the single-currency area that receives 40% of overall German exports.
Meanwhile, the Bundesbank increased its forecasts for German economic growth this year and next as record-low unemployment and a recovering Euro zone spur consumption. The German central bank sees gross domestic product growing 1.7% in 2015 and 1.8% in 2016. That compares with December estimates of 1% and 1.6%, respectively.
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Euro zone GDP expected to grow 0.4% in Q1
There is no major news forecasted to be released either in the Euro zone or the US on Tuesday of this week. Among just a few data announcements, the Euro zone's first-quarter GDP will be revised by the Eurostat, but no changes are estimated to take place, as the bloc's economy has probably added 0.4% in the first three months of 2015, in line with the preliminary reading.Read More: Fundamental Analysis
EUR/USD likely to lose value, trading range to narrow down
Judging from EUR/USD's developments that took place since May of the previous year, the pair is clearly trading downwards on a long-term chart. At the same time, it seems that now the pair is being bounded between the 2014 low and long-term downtrend line, meaning that it is currently hovering inside the descending triangle pattern. Moreover, this pattern implies a narrowing trading range, while the break-out point can be reached by the end of August. In the medium-term the common European currency may surge up to the 1.1330 mark where long-term downtrend is able to push the cross back in the direction of 1.05-1.10 area. However, the pair can also assume a possibility of growing as high as 200-day SMA around five figures above the downtrend, before finally making a decision to commence a bearish correction.Daily chart
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Initially, the EUR/USD cross was provided with some bearish momentum by the long-term downtrend at 1.1315. However, strong US payrolls triggered further weakness of the pair. Losses have only been capped by a dense cluster of supports around 1.1070, with 100-day SMA playing the leading role in stopping the Euro from falling. At the moment the pair is required to close below 1.1065 in order change the near term outlook back to the bearish one.
Hourly chart
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Read More: Technical Analysis
EUR/USD sentiment are pending orders are bearish
Meanwhile, pending orders to buy the Euro against the US Dollar in 100-pip range from the spot price plunged by 16% during the past 72 hours, as they are in the minority again with the share of just 40%.
It proclaims that in case the EUR/USD rises in value, the pair's near-term gains can be capped by the May 22 high at 1.1209. On the other hand, a downward development of the Euro is likely to be extended down to the 55-day SMA at 1.0987.
Spreads (avg,pip) / Trading volume / Volatility
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between May 8 and June 8 expect, on average, to see the currency pair around 1.11 by the end of September. Though the majority of participants, namely 64% of them, believe the exchange rate will trade generally below 1.12 this level in ninety days, with 45% alone seeing it below 1.08. Alongside, 16% of those surveyed reckon the price will trade in the range between 1.12 and 1.18 by the end of September of this year.
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