- Pending orders in 100-pip range from the current market price are negative (38% bullish / 62% bearish)
- In case the pair increases in price, the closest resistance for it is located at 1.1927
- The downward movement is possible as well, while for that purpose the closest support is placed at 1.1853
- Upcoming events on January 8: Eurozone Retail Sales, Germany Factory Orders, US Unemployment Claims
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The Euro zone economy ended 2014 with the poorest performance for over a year as further decline in prices across the region failed to boost business activity, increasing pressure on the European Central Bank to deploy additional stimulus. Markit's final Composite Purchasing Managers' Index for December dropped to 51.4 compared with an earlier estimate of 51.7, but better than the preceding month's reading of 51.1, which marked the lowest level in more than a year.
Meanwhile, business activity in Germany's services sector remained steady in December, overshooting analysts' expectations and preliminary data. The services PMI in the Euro zone's number one economy came in at 52.1 in December. France's services sector managed to move back into expansion territory, as the final services PMI rose to 50.6 compared with the preliminary 49.8 reading and November's result of 47.9.
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Thursday to bring little fundamental data for EUR/USD
After a number of important fundamental indicators that are being released on Wednesday, the next trading day is likely to be rather calm for the most traded currency pair. The only important data will include retail sales in the Eurozone for November as they are expected to increase further by 0.3%. European data will additionally show a change in German factory orders for the same month. In the second part of the day, US statistical authorities will release scheduled data on unemployment claims in the country for the week ended January 4.Read More: Fundamental Analysis
EUR/USD sets 2005 low as new long-term goal
The long-term outlook for the EUR/USD currency pair is remaining bearish both in short and long-term. Additionally, the cross has recently managed to reach the lowest point of the previous year at 1.2096, just before it ended on December 31. Moreover, in January the pair continued declining well-below the 1.20 major level. Taking into account the present situation and bearish outlook for the Euro, the pair is likely to drop down to 2005 low at 1.1639 in the medium-term, even though a short-term rebound up to 1.21 is not excluded. Moreover, analysts suggest that in case of Eurozone's QE later this year the single currency may fall further and trade towards 1.10.Daily chart
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On Tuesday, the EUR/USD currency pair deteriorated even more considerably, as they pair has finally managed to cross the demand area around 1.1930 (monthly and weekly S1). As a result of this action, the Euro plummeted below the major level of 1.19 and is currently testing strength of the 2010 low. This line is reinforced by the weekly S2 at 1.1853; therefore, the pause here is possible. In case of successful attempt to cross this support, the next obstacle is located only at 1.1781 (monthly S2).
Hourly chart
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Read More: Technical Analysis
Opened positions stay bullish, long pending orders rebound slightly
Additionally, long pending orders in 100-pip range from the current market price increased slightly from yesterday's 29% to reach 38% in the morning on Wednesday. It implies that, in case the pair increases in price, in the medium-term bearish pressure may stop the pair from climbing further around the monthly S1 at 1.1939.
On the other hand, if the Euro declines, the losses may potentially extend down to monthly S2 at 1.1781 in the foreseeable future.
Spreads (avg,pip) / Trading volume / Volatility
Community expects Euro to fall further against US dollar
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Jignesh, one of the community members participating in the survey, motivates his bearish outlook towards the common currency by saying that the EUR/USD currency pair has recently managed to break a number of important support lines, including a monthly trend-line and 1.20 major level. He also adds that the "we may see a bit of a pull back to start the week but selling pressure should be strong."
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Dec 7 and Jan 7 expect, on average, to see the currency pair just above 1.22 by the end of April. Though the largest portion of participants, namely 35% of them, believe the exchange rate will drop down to the 1.22/1.18 region in ninety days. On top of that, the 23% of those surveyed reckon the price will fall below 1.18 by the end of the first quarter of the next year.
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