- Commands to buy the Euro versus the US Dollar in 100-pip range are negative (47% bullish / 53% bearish)
- The closest resistance for this pair is located at 1.1256
- At the same time, the closest support is currently placed at 1.1116
- Upcoming events on March 3: Germany Retail Sales (Jan)
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French consumers appeared to be lavish in January, adding to hopes buoyant consumer spending will support recovery of the Euro zone's second biggest economy. Consumer spending in France rose 0.6% in January from the prior month, marking the third consecutive month of increase. Measured on year-over-year basis spending was 2.6% higher, Insee reported.
Meanwhile, consumer inflation in the Euro zone's third biggest economy, Italy, rebounded in February following a steep decline in the preceding month. On a monthly basis, Italy's CPI rose 0.3%, while measured in annual terms inflation fell 0.2%, beating expectations for a 0.5% slide.
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German retail sales to have influence on markets tomorrow
On March 3, only Germany's retail sales are getting ready to be released among fundamental indicators very medium and high importance. They are estimated to improve 0.4% in January on a monthly basis, while the annual change is likely to weaken down to 2.6%. The American side, in turn, will remain rather silent on Tuesday; therefore, all eyes will mostly be turned to the mentioned data from the Eurozone's leading economy.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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After a sharp drop amounted to 160 pips on Thursday, the shared currency stabilised a day later. Even though the EUR/USD pair tried to rebound toward 1.1250, it failed to sustain a recovery and closed below the round level of 1.12. Judging from technical indicators, the cross is likely to remain silent in the near term, while in course of the new working week a continuation of the down-trend is still expected. The closest support is located at 1.1116 (weekly S1); therefore, any bearish pressure may push the Euro in the direction of this line.
Hourly chart
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EUR/USD sentiment is neutral, buy commands return below 50%
Additionally, SWFX pending orders to buy the Euro against the US Dollar in 100-pip range from the spot are in the minority and account for just 47% of all. It proclaims that in case the EUR/USD rises in value, the pair's medium-term gains are likely to be capped by the monthly pivot point at 1.1302. On the other hand, a potential downward development of the Euro is considered to be extended down to the monthly S1 at 1.1070.
Spreads (avg,pip) / Trading volume / Volatility
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Feb 2 and Mar 2 expect, on average, to see the currency pair around 1.1350 by the end of May. Though the majority of participants, namely 51% of them, believe the exchange rate will drop below 1.12 in ninety days, with 23% alone seeing it below 1.08. Alongside, 22% 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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