- Commands to buy the Euro versus the US Dollar in 100-pip range from the spot are slightly bullish (54% long / 46% short)
- The closest resistance for this pair is located at 1.1360
- At the same time, the closest support is currently placed at 1.1294
- Upcoming events on June 10: US Monthly Budget Statement (May), Italy and France Industrial Production (Apr)
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The German economy continues to post a better-than-expected data, with the nation's exports and industrial output rising more sharply than predicted in April. Seasonally adjusted exports rose by 1.9% on the month, according to Destatis, far outstripping the median forecast of economists for a 0.1% gain. April marked the third consecutive month of growth in exports.
In the meantime, imports dropped 1.3%, against expectations for a 0.5% rise, widening German trade surplus to 22.3 billion euros. Moreover, industrial production increased 0.9% in April, following the 0.4% decline in the previous month and overshooting economists' consensus forecast for a 0.6% growth.
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US federal budget shortfall to narrow in May
Market expectations assume that US budget deficit will decline in May on the annual basis, even though it is going to show a major deterioration on the monthly basis after positive numbers in April. The deficit is forecasted to have stayed at $98 billion last month, down from a $130 billion gap in May 2014, but up from a $156.7 billion seasonally-caused surplus in April 2015.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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The common currency surged more than 200 pips on Monday, as the EUR/USD pair was provided with substantial bullish momentum around the monthly PP at 1.1089. This line is also strengthened by the 100-day SMA, and they altogether pushed the Euro upwards. At the moment the pair is testing a long-term downtrend around 1.13. However, only a successful consolidation above supply at 1.1360 (monthly R1) will negate bearish risks, which currently tend to remain in place.
Hourly chart
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Read More: Technical Analysis
EUR/USD sentiment unchanged, pending orders are back above 50%
Meanwhile, pending orders to buy the Euro against the US Dollar in 100-pip range from the spot price are swinging around 50% for the fifth consecutive day. Yesterday, they advanced by 14% to reach 54% in the morning on June 9, following a considerable upward change of the EUR/USD cross in the preceding day.
It proclaims that in case the EUR/USD rises in value, the pair's near-term gains can be extended as high as the monthly R1 at 1.1360. On the other hand, a downward development of the Euro is likely to be capped by the May 22 high at 1.1208.
Spreads (avg,pip) / Trading volume / Volatility
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between May 9 and June 9 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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