- Commands to buy the euro versus the dollar in 100-pip range from spot are still remaining moderately pessimistic (46% bullish / 54% bearish)
- In case the pair increases in price, the closest resistance for it is located at 1.1496
- The downward movement is possible as well, while for that purpose the closest support is placed at 1.1439
- Upcoming events on February 7-9: Germany Current Account (Dec) and Trade Balance (Dec)
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The European Central Bank poured cold water on Greece's attempts to find support overseas to fix the country's finances. The central bank said that it would no longer accept Greece's bonds as collateral or monetary operations starting next week. This means that Greek banks will not be able to use their bonds for cash funding from other banks. Instead the Greek central bank will have to provide banks with billions of euros of emergency funding.
Meanwhile, the European Commission's winter economic forecast suggests that all EU member states will grow again this year, with the economic output picking up moderately in both the EU and Euro zone, before accelerating further in 2016. The Euro zone's economy is seen growing 1.3% throughout this year, by expanding at a 1.9% rate in 2016.
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Destatis to publish current account and trade balance data on Monday
Monday of the next working week is seen to be rather poor in terms of important fundamental statistics both from the Eurozone and the United States. Only Germany's statistical office Destatis will announce numbers on current account and trade balance in the country for December of the previous year. The latter, in turn, is expected to stay on a strong surplus side, helped by weaker Euro.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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Yesterday, EUR/USD cross strengthened by gaining the same value it lost back on Wednesday's. Therefore, during last three days pair's movements were located exactly in the range between 1.13 and 1.15. From the upside the Euro is still capped by a strong bunch of resistance lines, represented by monthly PP, 23.6% Fibo and 20-day SMA. As a result, the outlook for Friday tends to be bearish, while a breach of supply zone is unlikely in the near term.
Hourly chart
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Read More: Technical Analysis
Pending orders on EUR/USD stay on bearish side
At the same time, SWFX commands to acquire the Euro in 100-pip range from the spot price rose moderately to reach 46%, even though they are still remaining on the negative territory. It means that, in case the pair increases in price, in the medium-term gains are likely to be limited by the 23.6% Fibo at 1.1519.
On the other hand, if the Euro declines, total losses have a chance to be extended down to the weekly S1 at 1.1114 in the medium-term.
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 6 and Feb 6 expect, on average, to see the currency pair around 1.13 by the end of May. Though the majority of participants, namely 55% of them, believe the exchange rate will drop down even below 1.12 in ninety days, with 25% alone seeing it below 1.08. Alongside, 19% 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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