- Commands to buy the Euro versus the US Dollar in 100-pip range are strongly negative (28% bullish / 72% bearish)
- The closest resistance for this pair is located at 1.0942
- At the same time, the closest support is currently placed at 1.0759
- Upcoming events on March 11: France Non-Farm Payrolls (Q4) and Current Account (Jan), ECB President Mario Draghi's Speech, US Monthly Budget Statement (Feb)
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The European Central Bank began buying government bonds under its quantitative easing programme designed to underpin inflation in the Euro zone. The plan calls for the 19 central banks in the currency bloc to purchase around €60 billion of public and private bonds each month until at least September 2016.
Meanwhile, in France the central bank revised downwards its growth outlook for the Euro zone's second biggest economy. The Bank of France now predicts the nation's economy to grow 0.3% in the first quarter, compared with the 0.4% annual growth expected in January. Nevertheless, the projected growth of 0.3% would be still higher than the 0.1% rise in the last quarter.
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US to publish budget balance data on Wednesday
Tomorrow, the vast part of statistical data that is going to be announced is not considered to have a very high importance level. Despite that, some of it is likely to attract economists' attention in course of the day. At first, France is publishing the employment growth and current account data for the fourth quarter of 2014 and January 2015, respectively. Moreover, US budget deficit has probably widened to $190 billion in February of this year.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 by buying government bonds since March 9. The programme is likely to continue pushing the Euro downwards. Moreover, the lowest point since the year 2003 just above 1.08 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 decline below 1.05 towards the end of June. Short-term bullish actions may take place, but their impact and size are still expected to be inappropriate for the common currency to commence a stable recovery in the medium-term. Moreover, some market participants suggest it may fall further and even trade towards the parity in course of second half the year.Daily chart
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On Monday, the EUR/USD pair failed to rebound noticeably and added just 20 pips during trading, by reaching the 1.0850 mark. Moreover, a decline resumed in the early morning of Tuesday and currently the pair is already testing the 1.08 major level. In case of success, the next demand zone at 1.0759 (2003 low) will be under the risk of being breached in the near term. While this support is only reinforced by the Bollinger band at 1.0767, outlook for the pair remains fairly negative.
Hourly chart
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Read More: Technical Analysis
EUR/USD sentiment remain positive, pending orders stay in red
Additionally, pending orders to buy the Euro against the US Dollar in 100-pip range from the spot have lost additional four percentage points from Monday to just 28% this morning. It proclaims that in case the EUR/USD rises in value, a pair's potential rebound can be limited by the major level at 1.0850. On the other hand, a potential downward development of the Euro is considered to be extended down to the monthly S3 at 1.0709.
Spreads (avg,pip) / Trading volume / Volatility
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Feb 10 and Mar 10 expect, on average, to see the currency pair around 1.13 by the end of June. Though the majority of participants, namely 53% of them, believe the exchange rate will drop below 1.12 in ninety days, with 25% 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 May of this year.
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