- Pending orders in 100-pip range from the current market price stay negative (40% bullish / 60% bearish)
- In case the pair increases in price, the closest resistance for it is located at 1.2554
- The downward movement is possible as well, while for that purpose the closest support is placed at 1.2468
- Upcoming events: German Ifo Business Climate, US Unemployment Claims, Philly Fed Manufacturing Index
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Activity in the manufacturing and services sectors in the 18-nation bloc improved in December, despite the mixed data coming out from the region's largest economies, namely Germany and France. The preliminary manufacturing PMI for the Euro bloc rose to 50.8 points up from 50.1 in November, remaining in the green zone for 18 consecutive months. As to the Euro zone's services PMI, the flash reading climbed to 51.9 points in the reported month, up from 51.1 in November. Moreover, the closely watched composite PMI came out at 51.9 points, also an improved reading compared to a month earlier.
Meanwhile, German investors became more optimistic in December as the ZEW index, measuring investors' sentiment for the next six months, advanced to 31.8 in December, compared with 11.5 recorded in November. The ZEW Current Situation Index also jumped considerably, soaring to 34.9 following a 3.3 figure a month earlier.
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Business climate in Germany to be closely watched on Thursday
On Thursday, a portion of important economic data from different countries is going to be published and is likely to have a direct impact on the performance of the single currency. At first, Ifo Institute will release the index for business climate in Germany, which is forecasted to rebound slightly. Besides that, the EU Economic Summit starts tomorrow in Brussels. From American side, there will be weekly data on jobless claims, as well as manufacturing index from the Federal Reserve Bank of Philadelphia.Read More: Fundamental Analysis
EUR/USD poised for rebound after crossing monthly PP
The long-term outlook for the EUR/USD remains bearish, even though the currency pair has recently breached the long-term downtrend line and the monthly pivot point, as they both used to be considerable resistances for the cross. Therefore, in the short and medium-term we can see the pair hovering around the 1.25 mark. However, any negative impetus will push the cross to the downside, with a long-term goal located at 1.2246 (2014 low) for the time being. From the upside, the next major supply zone is placed around the 1.26 level (23.6% Fibo, weekly R2).Daily chart
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Most traded currency cross on the FX market rebounded considerably on Tuesday, as the Euro surged above the monthly PP. Moreover, it has even breached the weekly R1 but closed below it at 1.2510, being that this supply zone is reinforced by 55-day SMA, Bollinger band and the monthly R1. Nevertheless, right now we would assume the EUR/USD pair to trade between 1.2470 and 1.2550 in the short-term, while daily indicators still remain neutral.
Hourly chart
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Read More: Technical Analysis
Both opened positions and pending orders remain bearish
Pending orders in 100-pip range from the current market price slipped back to the level seen three days ago, as now only 40% traders are planning to acquire the Euro versus the Buck. It implies that, in case the pair gains value, in the medium-term it may be stopped by the monthly R1 at 1.2579.
On the other hand, if the pair declines, the bearish pressure is likely to strengthen and extend losses below the weekly pivot point, which is located at 1.24.
Spreads (avg,pip) / Trading volume / Volatility
Community forecasts Euro to lose ground against Greenback
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MrSami, one of the community members participating in the survey, motivates his bearish bias towards the common currency by saying that there are only two weeks left before the year ends and the pair is likely to hit the 2014 low soon. On the other hand, the trader adds that in case the the pair fails to cross the 1.2310 support, then "a pullback up to 1.27 levels may be expected".
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Nov 17 and Dec 17 expect, on average, to see the currency pair at 1.2328 by the mid-March. Though the largest portion of participants, namely 26% of them, believe the exchange rate will drop down to the 1.22/1.20 region in sixty days. On top of that, 28% of the surveyed reckon the price will fall below 1.20 by the end of the first quarter of the next year.
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