- Commands to buy the Euro versus the US Dollar in 100-pip range are positive (58% bullish / 42% bearish)
- The closest resistance for this pair is located at 1.1065
- At the same time, the closest support is currently placed at 1.1035
- Upcoming events on March 6: Germany Industrial Production (Jan), France Budget Balance (Jan) and Trade Balance (Jan), Euro zone GDP (Q4), US Non-Farm Payrolls (Feb), Unemployment Rate (Feb) and Trade Balance (Jan)
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Retail sales in the currency bloc rose for the fourth consecutive month in January and the quickest pace in more than nine years. The sustained increase in sales was supported by household spending power due to lower oil prices, which have freed up cash for Europeans to spend on other goods and services. Sales soared 3.7% in 12 months to January, topping economists' expectations for a 1.9% rise.
On top of that, Markit's composite PMI, which measures business activity in Euro zone manufacturing and services sectors, climbed to 53.7 in February, compared with 52.6 booked a month earlier. In Germany, services sector improved last month, with the corresponding gauge rising to 54.7 in February, up from 54.0 in the preceding month.
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Euro zone to revise GDP numbers on Friday
On the last day of this working week, there is a big number of fundamental news that is getting ready to be release and which is likely to influence the EUR/USD pair significantly. Among some of them, the Euro zone is publishing the final GDP numbers for the last quarter of 2014, while economic growth can be adjusted slightly upwards. Moreover, US economy is forecasted to have added 240,000 new jobs in February and the jobless rate has probably decreased back to 5.6%.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 considerable drop back yesterday, the EUR/USD pair continues declining on Thursday morning as well. On Wednesday it lost more than 100 pips and is getting additional 40-pip hit today. The Euro has already crossed weekly and monthly S1 support lines and approached the next demand zone at 1.1035 (weekly S2), where a new 2015 low has been set. If this level fails to act as strong support, a decline down to 1.0943 (monthly S2) is not off the table, depending on what Mario Draghi reveals today during the ECB meeting in Cyprus.
Hourly chart
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EUR/USD sentiment and pending orders change to positive
Additionally, some of SWFX traders fixed their profit on short trades as pending orders to buy the Euro against the US Dollar in 100-pip range from the spot have also advanced notably to reach 58% this morning. It proclaims that in case the EUR/USD rises in value, the pair's potential rebound can be extended up to the weekly S1 at 1.1116. On the other hand, a potential downward development of the Euro is considered to be stopped by the monthly S2 at 1.0943.
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 5 and Mar 5 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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