- Commands to buy the Euro versus the US Dollar in 100-pip range from the spot are strongly bullish (70% long / 30% short)
- The closest resistance for this pair is located at 1.1373
- At the same time, the closest support is currently placed at 1.1294
- Upcoming events on May 15: US Industrial Production (Apr) and Empire State Manufacturing Index (May)
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The Euro zone's economic output rose 0.4% in the first quarter, faster than both the US and UK for the first time since the first quarter of 2011. That marked an increase from the 0.3% growth recorded in the December quarter of last year, but was slightly weaker outcome than the 0.5% rate estimated by economists. On an annualized basis, the economy grew 1.6%. For the first time since the first half of 2010, all four of the Euro zone's biggest economies recorded growth, while Spain is leading the recovery.
The French economy smashed expectations, expanding by 0.6% in the first quarter following zero growth in the previous quarter. Italy also returned to expansion, with GDP growing by 0.3%, and Spain was a star performer, growing by 0.9%. Germany's economy, the Euro area's powerhouse, slowed more steeply than expected, to record growth of 0.3% compared with 0.7% in the previous period.
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US manufacturing to rebound slightly in April
On the last day of this working week, the only influential fundamental news will be released in the US, while Europe will stay aside after the Thursday's Bank Holiday. American industrial production is projected to add 0.1% in April, following a 0.6% drop a month before. In the meantime, analysts expect the manufacturing activity in New York area to rebound as well, from -1.19 points in April up to 4.50 this month.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 1.1450 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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EUR/USD climbed significantly on Wednesday, reflecting continuous US Dollar's weakness. The cross surged past the 23.6% Fibonacci retracement of May-March down-trend and closed just below the recent (May 7) high and weekly R1 at 1.1352. Daily technical indicators are still pointing to the upside, but we should be wary of weekly and monthly studies that are bearish. Therefore, the next resistance is face of long-term downtrend at 1.1470 may reverse the recent positive tendency of the pair.
Hourly chart
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EUR/USD sentiment stays bearish, while pending orders surge repeatedly
Starting from the beginning of last week, pending orders on the EUR/USD currency pair were increasingly volatile every single day. During the past 24 hours the commands to buy the Euro against the US Dollar in 100-pip range from the spot jumped noticeably again, but this time they hit the record-high mark of 70%, posting a 26% gain from Wednesday.
It proclaims that in case the EUR/USD rises in value, the pair's potential rebound is likely to be extended up to the monthly R1 at 1.1486. On the other hand, a downward development of the Euro should be capped by the 23.6% Fibonacci retracement at 1.1294.
Spreads (avg,pip) / Trading volume / Volatility
Community is waiting for the Euro to stay unchanged this week
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Jignesh, one of the community members participating in the survey, motivates his bullish outlook towards the common currency by saying that "EUR/USD has recently taken out some major resistance at 1.1050 and 1.11 level. The pair should be supported to the downside and is poised for an upside move. Weekly & Monthly candlesticks indicate a continued bullish move, while dailies suggest a pullback early in the week."
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Apr 14 and May 14 expect, on average, to see the currency pair around 1.10 by the end of August. Though the majority of participants, namely 52% of them, believe the exchange rate will trade below this level in ninety days, with 39% alone seeing it below 1.06. Alongside, 26% of those surveyed reckon the price will trade in the range between 1.10 and 1.16 by the end of August of this year.
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