- Pending orders in 100-pip range from the current market price are strongly negative (26% bullish / 74% bearish)
- In case the pair increases in price, the closest resistance for it is located at 1.1853
- The downward movement is possible as well, while for that purpose the closest support is placed at 1.1781
- Upcoming events on January 10-12: US Labor Market Conditions Index, Treasury Bill Auctions (3M, 6M and 3Y) and Federal Budget Balance
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Retail sales in the Euro zone rose more than expected for the second consecutive month in November, adding to signs that plummeting oil prices are underpinning purchases of other goods and helping to prop up economic growth in the region. According to Eurostat, retail sales climbed by a seasonally adjusted 0.6% in November from the previous month, while on an annual basis sales rose 1.5%, suggesting consumer spending was on the rise in the final quarter of the year, likely reflecting the fall in oil prices, and leaving households with more money to spend on other goods and services.
Meanwhile, a separate report showed Euro zone economic sentiment remained unchanged in December versus the previous two months, as a more optimistic mood in the services and retail sectors and among consumers in the year-end was offset by a gloomier industry.
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US news to drive EUR/USD pair on Monday
As usually, the beginning of the next trading week on Monday as well as the weekend will not bring any major news from both sides to have any considerable influence on the EUR/USD currency pair and any other Euro crosses. While Monday will be silent in terms of data from Europe, the US Federal Reserve will publish the labor market conditions index which is important for them to set future directions of the monetary policy. Moreover, US Federal Budget Balance for December 2014 is going to be released the same day and is expected to show further improvement.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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For a tenth consecutive day the Euro has been underperforming the US dollar, as yesterday it dropped below the major level at 1.18 and has even crossed a considerable support line represented by the monthly S2 at 1.1781. However, towards the end of the trading session the pair managed to return back closer to 1.18. Today the cross has a chance to make a second attempt to breach this demand area. If successful, then we can expect the EUR/USD losing even more value and trade towards 1.1707 (weekly S3) in the next 24 hours.
Hourly chart
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Read More: Technical Analysis
Opened positions stay bullish at 52%, long pending orders are little changed
Additionally, long pending orders in 100-pip range from the spot have only slightly changed during last 24 hours of trading, as their share added one percentage point to 26%. As a result, pending orders are remaining close to their largest bearish level in more than two months. 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 2010 low at 1.1874.
On the other hand, if the Euro declines, the losses may potentially extend down to 2005 low at 1.1639 in the foreseeable future.
Spreads (avg,pip) / Trading volume / Volatility
Community expects Euro to fall further against US dollar
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Read More: Community Forecasts
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 9 and Jan 9 expect, on average, to see the currency pair around 1.22 by the end of April. Though the largest portion of participants, namely 33% of them, believe the exchange rate will drop down to the 1.22/1.18 region in ninety days. On top of that, the 26% 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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