- Commands to buy the Euro versus the US Dollar in 100-pip range from the spot are bearish (43% long / 57% short)
- The closest resistance for this pair is located at 1.1156
- At the same time, the nearest support is currently placed at 1.1131
- Upcoming events in the next 24 hours: France, Germany, Euro zone and US Manufacturing PMI (Jun), US ADP Employment Change (Jun)
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Greece fell in its financial abyss after the bailout programme, which had been supporting the economy for five years, expired at midnight Tuesday and the country missed its crucial 1.6 billion euro loan repayment to the IMF, reigniting fears over whether it will be able to remain in the currency bloc. Greece became the first developed country to fall into arrears on payments to the fund joining such countries as Sudan, Somalia and Zimbabwe.
Meanwhile, inflation across the 19-country currency bloc slid on year in June to 0.2% from 0.3% a month earlier. The decline in consumer prices was primarily caused by a 5.1% decline in energy prices. Despite the fall, June marks the third month in a row that the Euro zone's inflation has remained positive. In a separate release Eurostat said the unemployment rate in the Euro bloc remained unchanged at 11.1% in May.
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US employment to pick up in June
Today the most awaited data release is affiliated with the labour market in the US. The ADP Employment Change statistics is due at 12:15 PM GMT, and economists expect that US employers added 219,000 new jobs last month, up from a 201,000 increase in May. In the meantime, several countries in Europe and North America are going to publish the PMI indicators for manufacturing industries of their countries.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 September. In the medium-term the common European currency may show spikes as high as 200-day SMA and 2005 low at 1.16, but the downtrend will remain the main resistance and should be capable of pushing the cross back in the direction of 1.05-1.10 area in the long run.Daily chart
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Yesterday EUR/USD bounced back from the long-term downtrend, the line which is also supported by the weekly pivot point at 1.1234. At the same time, losses were halted by the 55-day SMA at 1.1131, but the market remained volatile amid the Greek crisis. The main target for bears is now being relocated to the 100-day SMA, weekly S1 and the lower Bollinger band around 1.1060, while any sluggish rebound should be immediately rejected by the mentioned resistances in the 1.1230 area.
Hourly chart
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EUR/USD sentiment and long pending orders below 50%
Meanwhile, the portion of pending orders to buy the Euro against the US Dollar in 100-pip range from the spot price added one percentage point from yesterday and reached the 43% mark.
It proclaims that in case the EUR/USD rises in value, the pair's near-term gains can be capped by the long-term downtrend at 1.1230. On the other hand, a downward development of the Euro is likely to be extended down to the 100-day SMA, currently at 1.1048.
Spreads (avg,pip) / Trading volume / Volatility
Community suggests the Euro will decline against the US Dollar this week
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geula4x, one of the community members participating in the survey, motivates his bearish outlook towards the single currency by saying that "EUR/USD opened this week with a big gap down. Greece has not reached an agreement with creditors, plus there is a referendum scheduled for next Sunday. All this suggests that Greece may leave the Euro Zone. Therefore, bears seem better positioned to take control this week. Resistance lies around 1.1220, Friday's daily high. Support lies around 1.0850, which has held price between May 26 and 28."
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Jun 1 and Jul 1 expect, on average, to see the currency pair around 1.12 by the end of September. Though the majority of participants, namely 53% of them, believe the exchange rate will trade below this level in ninety days, with 35% alone seeing it below 1.08. Alongside, only 21% 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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