- Pending orders in 100-pip range from the current market price returned back to negative (39% bullish / 61% bearish)
- In case the pair increases in price, the closest resistance for it is located at 1.2306
- The downward movement is possible as well, while for that purpose the closest support is placed at 1.2246
- Upcoming events: German Unemployment Change and Unemployment Rate, Eurozone Consumer Confidence, US Existing Home Sales
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Business morale among German top executives improved in December, reinforcing the view that Europe's number one economy is on course to pick up in the final quarter of the year after narrowly avoiding a recession in the three months through September. The German Ifo Business Climate Index, which is based on a survey of manufacturers, builders, wholesalers and retailers, rose to 105.5 in the reported month, compared with an expected 105.5 reading.
The recently released Ifo survey echoes the signs of renewed sanguine mood seen in the recent ZEW index, which measures investor sentiment in Germany. According to the ZEW index released earlier this week, German investor optimism improved further in December, hitting the highest level since May 2014. On top of that, preliminary PMI data for the manufacturing and services sectors came in mixed, with the German manufacturing sector returning to expansion, while the services sector showed a deteriorating trend in December.
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German jobless rate, EU consumer confidence to be released on Monday
Unusually for Monday, there will be rather important statistical data published, which can have a significant impact on development of the Euro. As expected, the highest influence is going to come from German unemployment data, which includes the change in number of people without a job and the unemployment rate. Following that, the Eurostat will release a consumer confidence index for the Euro zone, which is likely to improve slightly and also drive the single currency on that day.Read More: Fundamental Analysis
EUR/USD returns back to 1.23
As the long-term outlook for the EUR/USD currency pair remains on the negative side, the single currency is likely to trade in the direction of the 2014 low for the next couple of days. Meanwhile, it is also possible that the most traded pair will set a new yearly low before the New Year starts. At the moment it is trading below the long-term downtrend line, even though for the past week the pair traded above it and was showing bullish signs. However, more hawkish approach from Fed pushed the Dollar to the upside. In case the annual minimum is crossed, the pair is likely to decline even down to the monthly S3 at 1.2098 in the long-term. From the upside, in turn, it is currently limited by a strong resistance area around 1.2550.Daily chart
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Yesterday, the EUR/USD pair continued to trade under the bearish pressure, as they pushed the cross below 1.23. At the moment the only support before the 2014 low is represented by a Bollinger band at 1.2255, which is not supposed to create major problems for pair's bears. Even though daily technical studies are still neutral, weekly ones are pointing to the downside, meaning that the next week we are likely to see a testing of this year's low.
Hourly chart
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Read More: Technical Analysis
Long positions gain majority, orders slip back to red zone
Meanwhile, commands to buy the Euro dropped considerably to 39% in 100-pip range from the spot. It implies that, in case the pair increases, in the medium-term the pair can be stopped by the monthly S1 at 1.2339.
On the other hand, if the pair declines, the bearish pressure may extend down to the monthly S3, which is located at 1.2098.
Spreads (avg,pip) / Trading volume / Volatility
Community forecasts Euro to lose ground against Greenback
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Read More: Community Forecasts
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 19 and Dec 19 expect, on average, to see the currency pair at 1.2328 by the mid-March. Though the largest portion of participants, namely 25% 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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