- Commands to buy the euro versus the dollar in 100-pip range from spot are staying strongly negative (37% bullish / 63% bearish)
- In case the pair increases in price, the closest resistance for it is located at 1.1466
- The downward movement is possible as well, while for that purpose the closest support is placed at 1.1332
- Upcoming events on January 29: France Consumer Spending (Dec), Spain Retail Sales (Dec), Germany CPI (Jan), Unemployment Change and Unemployment Rate (Jan), Eurozone M3 Money Supply (Dec) and Consumer Confidence (Jan), US Unemployment Claims (Jan 25) and Pending Home Sales (Dec)
© Dukascopy Bank SA
While Greece's Syriza party seeks to keep its election promise to replace the bailout plan, which expires on February 28, with a new agreement that eases austerity and relieves Greece's debt burden, European officials signal that debt reduction would be against the Euro zone rules and would set a precedent for other recession-hit countries. However, Syriza believes that it is unrealistic for Greece to repay its massive debt in full.
According to the Kiel Institute for the World Economy, Syriza's pledge to seek debt write-off would cost German taxpayers at least 20 billion euros, while the worst-case scenario suggests a loss of as much as 80 billion euros, if a cut of at least a half of Greece's public debt is approved. Yet, Eurogroup members, Euro zone finance ministers are ready to support Greece by providing more time to repay its debt.
Watch More: Dukascopy TV
Big portion of statistics from EU and US to be released on Thursday
Thursday is estimated to be a day when a lot of important fundamental statistics is going to be published both by European and American statistical authorities, thus providing the EUR/USD pair with many potential drivers. Data will range from consumer spending, retail sales to labour market and money market from both Eurozone and the US. Among Euro area countries, the most attention will be paid to German, French and Spanish numbers for mentioned indicators.Read More: Fundamental Analysis
EUR/USD's drop to continue in the long-term
The long-term outlook for the EUR/USD currency pair is remaining bearish both in short and long-term. The ECB has made a long-awaited decision to expand asset purchases back on Jan 22, which will continue pushing the Euro to the downside. Moreover, the lowest point since the year 2003 around 1.1113 has already been hit by EUR/USD cross. Taking into account present monetary conditions and bearish outlook for the Euro, the pair has a chance to go below 1.10 towards the end of the first quarter of this year. Short-term bullish actions are still possible, but their impact and size are not expected to be appropriate for the common currency to commence a stable recovery. Moreover, some market participants suggest it may fall further and even trade towards the parity in course of this year.Daily chart
© Dukascopy Bank SA
A strong correction of the Euro to the upside continued back on Tuesday. Bulls managed to push the cross above weekly pivot point at 1.1332 and consolidate above this resistance line, thus closing the trading day at 1.1380. The next supply zone seems already more complicated, with monthly S3 and 23.6% Fibo defending the area around 1.15. Judging from technical indicators, a down-trend may resume as soon as on Wednesday.
Hourly chart
© Dukascopy Bank SA
Read More: Technical Analysis
Opened positions on EUR/USD remain broadly neutral
At the same time, commands to acquire the Euro surged as many as six percentage points to 37% since yesterday. However, it still proclaims that, in case the pair increases in price, in the medium-term bearish pressure may stop the pair from climbing further around the monthly S3 at 1.1466.
On the other hand, if the euro declines, total losses may potentially extend down to the weekly S1 at 1.0984 in the foreseeable future.
Spreads (avg,pip) / Trading volume / Volatility
Community waiting for the Euro to stabilise this week
© Dukascopy Bank SA
Read More: Community Forecasts
aslamhammad, one of the community members participating in the survey, motivates his slightly positive outlook towards the common currency by saying that the EUR/USD "selling pressure is decreasing as QE programme was largely expected". He also supposed that the 1.10 level offers a good support for the Euro and the pair "may struggle to break it this week".
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Dec 28 and Jan 28 expect, on average, to see the currency pair around 1.15 by the end of April. Though the majority of participants, namely 51% of them, believe the exchange rate will drop down even below 1.14 in ninety days, with 24% alone seeing it below 1.10. Alongside, 24% of those surveyed reckon the price will trade in the range between 1.16 and 1.22 by the end of April of this year.
© Dukascopy Bank SA