- Commands to buy the euro versus the dollar in 100-pip range from spot changed from yesterday to become slightly positive (52% bullish / 48% bearish)
- In case the pair increases in price, the closest resistance for it is located at 1.1483
- The downward movement is possible as well, while for that purpose the closest support is placed at 1.1439
- Upcoming events on February 5: Germany Factory Orders (Dec), US Unemployment Claims (Jan 30) and Trade Balance (Dec)
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In Spain the number of unemployed people increased for the first time in three months to approximately 78,000 in January 2015. The number of jobless people beat expectations for an 83,400 increase. In January normally higher unemployment rate is reported, but this particular month had the smallest increase since 2007. During the last 12 months the number of unemployment registrations decreased by 288,744 people, which was the biggest decline per year since 1998, with the year-on-year jobless rate at 6%.
Meanwhile, the producer price inflation in the Euro zone decreased more than anticipated. The PPI plunged by 1%, compared to 0.3% in the preceding month, and 0.3 percentage points more than expected. The annual PPI decline rate was 2.7% in December 2014, which is 1.1% higher than in November 2014.
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German factory orders, US trade data to be watched on Thursday
Thursday is not estimated to come rich on fundamental data both from the United States and the Eurozone, even though there will be some interesting data to look at. At first, German statistical authorities will release numbers on factory orders in the country for December. From another side of the Atlantics in the US, unemployment claims for the week ended January 30 are getting ready to be announced, and they will be followed by the trade data for December. Net exports, however, may deteriorate further amid stronger US Dollar.Read More: Fundamental Analysis
EUR/USD set to weaken in the long-term
The long-term outlook for the EUR/USD currency pair is remaining bearish. 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 may take place, but their impact and size are not expected to be appropriate for the common currency to commence a stable recovery in the long-run. Moreover, some market participants suggest it may fall further and even trade towards the parity in course of this year.Daily chart
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On Tuesday the EUR/USD cross climbed notably during trading as it gained more than 100 pips over the day. Both US fundamental factors and optimistic political news from Greece pushed the Euro upwards above the weekly R1 to close at 1.1480. The pair, however, was capped by the 23.6% Fibo / monthly PP from above. On Wednesday, a correction can take place with a potential daily target located around 1.14.
Hourly chart
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Read More: Technical Analysis
Pending orders on EUR/USD jump above 50%
At the same time, SWFX commands to acquire the Euro in 100-pip range rebounded considerably during last 24 hours to reach 52% this morning. It means that, in case the pair increases in price, in the medium-term gains are likely to extend above the monthly PP at 1.1496.
On the other hand, if the Euro declines, total losses have a chance to be stopped by the weekly PP at 1.1268 in the foreseeable future.
Spreads (avg,pip) / Trading volume / Volatility
Community is waiting for the Euro to rebound by February 7
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Read More: Community Forecasts
transhuman, one of the community members participating in the survey, motivates his positive outlook towards the common currency by saying that "there is a wide range of support building up, and it is primed to push pair upwards". He also supposed that the overall situation for the pair will "coincide with an overall decline in the US Dollar and a relative decline of US stock market".
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Jan 4 and Feb 4 expect, on average, to see the currency pair around 1.13 by the end of May. Though the majority of participants, namely 62% of them, believe the exchange rate will drop down even below 1.12 in ninety days, with 23% alone seeing it below 1.08. Alongside, 20% of those surveyed reckon the price will trade in the range between 1.14 and 1.20 by the end of May of this year.
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