- Commands to buy the Euro versus the US Dollar in 100-pip range are strongly negative (19% bullish / 81% bearish)
- The closest resistance for this pair is located at 1.0708
- At the same time, the closest support is currently placed at 1.0638
- Upcoming events on March 12: Germany, France, Spain CPI (Feb), Bundesbank President Weidmann Speech, Euro zone Industrial Production (Jan), US Retail Sales (Feb) and Unemployment Claims (Mar 6)
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France's industrial production continued to increase in January, beating economists' expectations for a decline. According to the INSEE, French industrial output rose 0.4% in January from the preceding month's 1.4% gain, whereas analysts had called for a 0.3% drop. Measured on an annual basis, industrial production in the Euro zone's second biggest economy increased 0.6% in the measured period, following a revised 0.4% decline in December.
Meanwhile, while the ECB launched its QE programme, which is intended to kick-start economic growth and inflation in the Euro zone, Jens Weidmann, Bundesbank chief, once again criticized the bond-buying scheme. Weidmann said the plan blurred the lines between monetary and fiscal policy. Bundesbank President reiterated that threat of deflation was too low and did not justify a more expansive monetary policy as deployed by the ECB.
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US retail sales expected to show rebound for February
Among those fundamentals to watch tomorrow, the most important one is considered to be the retail sales numbers from the United States. This statistical data release has the highest importance level for tomorrow. In addition to that, influence on many of EUR currency pairs will come from inflation data in several Euro zone countries, while markets expect a rebound, following a revival of oil prices.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 in more than 12 years below 1.07 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 reach parity 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 below the parity in course of second half the year.Daily chart
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As the ECB has finally started to buy sovereign bonds under its QE programme, EUR/USD reacted in a strong bearish way to this news on Tuesday. Yesterday, the pair dropped considerably for second time in three days, while crossing the 2003 low, monthly S3 and weekly S1 supports. The Euro closed below 1.07 against the Greenback, thus posting a 150-pip daily plunge. A new 2015 low, however, was set at 1.0665. In case the pair fails to gain bullish momentum, it may fall down to weekly S2 around 1.0580 in the near term.
Hourly chart
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Read More: Technical Analysis
EUR/USD sentiment remain positive, pending orders drop below 20%
Additionally, pending orders to buy the Euro against the US Dollar in 100-pip range from the spot have lost additional nine percentage points from Tuesday to have just 19% this morning. It proclaims that in case the EUR/USD rises in value, a pair's potential rebound can be limited by 2003 low at 1.0759. On the other hand, a potential downward development of the Euro is considered to be extended down to the weekly S2 at 1.0573.
Spreads (avg,pip) / Trading volume / Volatility
Community is waiting for the Euro to rebound this week
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Read More: Community Forecasts
Likerty, one of the community members participating in the survey, motivates his bullish outlook towards the common currency by saying that "the Euro will make another leg lower to 1.0760 level, and I suppose would not continue its to depreciate below that." I " He also expects "a strong bounce/correction before the next week's FOMC."
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Feb 11 and Mar 11 expect, on average, to see the currency pair just above 1.12 by the end of June. Though the majority of participants, namely 54% of them, believe the exchange rate will drop down even below 1.12 in ninety days, with 26% alone seeing it below 1.08. Alongside, 24% 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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