- Commands to buy the euro versus the dollar in 100-pip range from spot are still remaining moderately pessimistic (48% bullish / 52% 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 11: France Current Account (Dec), US Monthly Budget Statement (Jan)
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One of the key highlights of this week is Greece's government meeting with Euro zone finance minister on Wednesday in Brussels to come up with a solution to the current standstill before Greece's bailout programme expires at the end of the month. Greece is seen asking Euro zone members for an emergency short-term bridging loan, to provide the Greek government with more time to negotiate new debt terms.
However, European Commission President Jean-Claude Juncker warned Athens that Europe would not accept all the pre-election pledges of Syriza's party. On top of that, Eurogroup chair, Jeroen Dijsselbloem, said that Euro zone governments will not consider a bridging loan to keep Greece financially afloat while it renegotiates a new debt deal.
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Fundamental part to stay silent for third day
According to the calendar of upcoming economic events, Wednesday is set to be the third consecutive day with no major fundamental data released. In Europe, France will only publish numbers on its current account balance for December of the previous year, while US will present a monthly budget statement for January which is likely to continue improving amid strong performance of country's economy. At the same time, these events are unlikely to have a significant impact on development of the Euro/Dollar cross tomorrow.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. On January 22, the ECB has made a long-awaited decision to expand its asset purchases 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 Monday, EUR/USD registered only marginal changes during the trading session. Such a calm development of the most traded currency pair followed four straight days of major movements last week. The round level at 1.13 managed to support pair's bulls, but it did not provide enough positive momentum for a notable jump. As a result, the Euro added just 25 pips and closed at 1.1325. Still, according to daily technical studies, the outlook seems to remain bearish.
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 dropped ten percentage points since during past 24 hours to account just for 37%, as they are still remaining on a confident 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 10 and Feb 10 expect, on average, to see the currency pair around 1.13 by the end of May. Though the majority of participants, namely 56% of them, believe the exchange rate will drop down even more below 1.12 in ninety days, with 26% alone seeing it below 1.08. Alongside, 20% 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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