- Commands to buy the euro versus the dollar in 100-pip range from spot are still remaining moderately pessimistic (47% bullish / 53% bearish)
- At the moment, the closest resistance for the pair is located at 1.1379
- In case of development to the south, the closest support is currently placed at 1.1225
- Upcoming events on February 10: France, Italy Industrial Output (Dec), US Wholesale Inventories (Dec)
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German industrial production, which measures the volume change in output of factories, mines and utilities, barely rose in December, adding to signs that the European powerhouse experienced a patchy growth at the end of 2014. Industrial output climbed 0.1% in the reported month following a revised 0.1% growth in November and against analysts' forecast for a 0.4% increase.
Meanwhile, Bostjan Jazbec, the ECB's Governing Council member, hinted that the central bank may wind down its government bond-buying programme sooner than it was originally planned in September 2016 if inflation reaches the targeted level of just below 2%. Jazbec also said that QE would have a positive impact on the Euro zone economy, providing governments implemented structural reforms.
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Euro to be influenced by data outside the region on Tuesday
Tuesday will continue to be lack on any fundamental data with high level of importance, which could potentially drive the EUR/USD cross on that day. Only Italy and France will publish statistics on industrial production for December. This release will be followed by US wholesale inventories for the same month. The majority of Tuesday's important indicators will come from UK and China. They, in turn, are likely to be able to put pressure on other EUR and USD pairs across the board.Read More: Fundamental Analysis
EUR/USD expected 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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EUR/USD cross dropped notably on Friday as the pair remained strongly volatile for a fourth day in a row. The monthly pivot point pushed the single currency down once again, as it dropped from 1.1480 down to 1.1310 during just 24 hours' period. From the technical perspective of the new week, no supports for the pair are currently placed at least down to 1.1225 (weekly S1). Therefore, we may see a decline towards this level on Monday, as suggested by daily technical indicators at the moment.
Hourly chart
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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 47%, 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 S3 at 1.0983 in the medium-term.
Spreads (avg,pip) / Trading volume / Volatility
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Jan 9 and Feb 9 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 more below 1.12 in ninety days, with 25% alone seeing it below 1.08. Alongside, 21% of those surveyed reckon the price will trade in the range between 1.12 and 1.18 by the end of May of this year.
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