- Commands to buy the Euro versus the US Dollar in 100-pip range are negative (38% bullish / 62% bearish)
- The closest resistance for this pair is located at 1.1256
- At the same time, the closest support is currently placed at 1.1139
- Upcoming events on March 5: France Unemployment (Q4), Germany Factory Orders (Jan), Italy GDP (Q4), ECB Interest Rate Decision and Press Conference, US Unemployment Claims (Feb 27) and Factory Orders (Jan)
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A flurry positive data came out on Tuesday from the Euro zone countries. In Germany, retail sales surged at the fastest pace in seven years in January, adding to hopes that private consumption will support growth of the region's powerhouse. Retail sales soared 2.9% in real terms month-over-month in the beginning of 2015, overshooting even the highest estimate for a 1.1% gain.
In the meantime, Spain saw its unemployment rate falling in February, as fewer Spaniards lost their jobs. The number of unemployed in the Euro zone's fourth largest economy declined by 13,500 in the reported month, whereas the jobless rate still remained at an unhealthy level of 23,70% in the December quarter.
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ECB to announce details of QE programme on Thursday
On March 5, the European Central Bank is holding its scheduled monetary policy meeting in Cyprus. The monetary authorities are going to decide on details of the quantitative easing programme, which are expected to be presented by Mario Draghi later during the press conference. Meanwhile, Italy is publishing revised GDP numbers for October-December quarter, which will be accompanied by factory orders for Germany and US, as well as French jobless rate for last three months of 2014.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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For a fourth consecutive day the EUR/USD currency pair is posting no considerable daily changes in its value. On Tuesday, despite being initially supported by the Bollinger band, the pair failed to consolidate above the 1.12 mark and fell back below it. Still, this technical level continues to act as a strong support line for the Euro at the moment. Daily technical indicators are mixed right now; therefore, a decline below 1.1120 (weekly S1) is unlikely in the near term.
Hourly chart
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Read More: Technical Analysis
EUR/USD sentiment and pending orders are negative
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 38%. 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
Community is waiting for the Euro to decline this week
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Read More: Community Forecasts
Jignesh, one of the community members participating in the survey, motivates his bearish outlook towards the common currency by saying that "EUR/USD is quite oversold at current levels after a strong CPI number, which drove the USD back to resistance." He also added that there are important "NFP numbers will be released, which should trigger some USD buying toward the end of the week."
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Feb 4 and Mar 4 expect, on average, to see the currency pair around 1.13 by the end of June. Though the majority of participants, namely 52% 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, 23% of those surveyed reckon the price will trade in the range between 1.12 and 1.18 by the end of June of this year.
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