- Pending orders in 100-pip range from the current market price are negative (40% bullish / 60% bearish)
- In case the pair increases in price, the closest resistance for it is located at 1.2338
- The downward movement is possible as well, while for that purpose the closest support is placed at 1.2107
- Upcoming events: French Consumer Spending, Italian Retail Sales, US Final GDP, Core Durable Goods Orders and New Home Sales
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German consumer morale rose to the highest level in eight years, as shoppers expect the European growth engine to regain momentum. Gfk consumer sentiment indicator, based on a survey of around 2,000 Germans, climbed to 9.0 heading into January, up from 8.7 in December. Shoppers became more willing to spend as plummeting energy prices pushed down the cost of heating oil and petrol, leaving households with more money to spend on other items. On top of that, domestic conditions remain favourable for consumption, with employment at a record high, wages advancing and inflation moderate.
A separate report showed the Euro zone current account surplus shrank in October compared to the preceding month on a seasonally adjusted basis, according to the European Central Bank. The current account surplus declined to 20.5 billion euros, down from a revised 32.0 billion euros reported in September.
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US data to impact EUR/USD currency pair the most tomorrow
As estimated, the single European currency will not be considerably influenced by any fundamental data in the majority of its pairs tomorrow, only except the EUR/USD. US statistical authorities are going to release a number of important fundamental indicators, including the final reading of country's gross domestic product in the third quarter of this year, as well as core durable goods orders and new home sales. This data is most likely to be a considerable driver for all USD-crosses on Tuesday.Read More: Fundamental Analysis
EUR/USD approaches 1.22
As the long-term outlook for the EUR/USD currency pair has been remaining bearish for the last couple of weeks, the cross managed to reach a new minimum of this year at 1.2219. At the moment it is also trading below the long-term downtrend line, even though two weeks ago the pair traded above it and was showing bullish signs. However, more hawkish approach from the Fed is reflected by the Dollar's upside movement. Taking into account the present situation, the pair is likely to decline even more down to the monthly S3 at 1.2098 in the long-term. On the other hand, there is a possibility of a rebound up to 1.23, before the leadership is finally overtaken by pair's bears.Daily chart
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Taking into account the short-term development of the pair, EUR/USD stayed under bearish pressure on Friday of last week, as the shared currency dropped below 1.23 and consequently set a new 2014 low at 1.2219. Moreover, the pair fell below the monthly S2, which is located at 1.2228. As a result, we can see a slight consolidation around this major level, while in the next few days the pair may continue declining further.
Hourly chart
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Read More: Technical Analysis
Long positions preserve majority, orders remain unchanged
Additionally, long pending orders in 100-pip range from the spot added only one percentage point from Friday to reach 40%. It implies that, in case the pair increases, in the medium-term the pair can be stopped by the monthly S1/weekly PP at 1.2338.
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 22 and Dec 22 expect, on average, to see the currency pair at 1.2328 by the mid-March. Though the largest portion of participants, namely 29% of them, believe the exchange rate will drop down to the 1.22/1.20 region in sixty days. On top of that, 27% 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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