- Commands to buy the Euro versus the US Dollar in 100-pip range are strongly negative (29% bullish / 71% bearish)
- The closest resistance for this pair is located at 1.0621
- At the same time, the closest support is currently placed at 1.0335
- Upcoming events on March 19: US Unemployment Claims (Mar 13) and Philadelphia Fed Manufacturing Survey (Mar)
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Some positive data came out on Tuesday, supporting ECB President Mario Draghi comments earlier in the week that the Euro zone's sustained recovery is underway. Sentiment among German investors rose for the fifth straight month to the highest level in 13 months in March, led by sturdy domestic economic data. The index of investor and analyst expectations, which is designed to predict economic developments in coming six months, increased to 54.8 from 53 in February, according to the ZEW Centre of European Economic Research.
Other recent data has painted a positive picture of the Euro zone's number one economy, with the private sector gaining momentum, jobless rate declining, retail sales soaring and output increasing, though orders have dropped. Moreover, low oil prices, a weak Euro and the ECB's QE programme also indicate that Germany's economy will grow robustly this year after expanding by 1.6% last year.
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Thursday to stay silent after rich Wednesday statistics
Following a number of important events during Wednesday of this week, the following day is going to be rather silent in terms of fundamental data. While there is going to be completely no important news from the Euro zone, the United States will announce weekly unemployment claims for the week ended March 13. Moreover, the Federal Reserve Bank of Philadelphia is estimated to show an improvement in activity of the manufacturing sector in Philadelphia region.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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Despite strongly negative expectations, EUR/USD managed to gain value for the second consecutive day on Tuesday. The pair has even tried to violate the weekly PP resistance at 1.0621 and grow above this important level. However, the Euro still seems to be rather weak in order to register substantial gains against the US Dollar. Most likely, the pair will remain little volatile in course of Wednesday, even though the mentioned supply is capable in sending the pair significantly downwards.
Hourly chart
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Read More: Technical Analysis
EUR/USD sentiment and pending orders are negative
Additionally, pending orders to buy the Euro against the US Dollar in 100-pip range from the spot dropped noticeably during past 24 hours to reach just 29% this morning. It proclaims that in case the EUR/USD rises in value, the pair's potential rebound can be limited by the weekly PP at 1.0621. On the other hand, a potential downward development of the Euro is considered to be extended down to the weekly S2 at 1.0177.
Spreads (avg,pip) / Trading volume / Volatility
Community is waiting for the Euro to decline this week
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Read More: Community Forecasts
rokasltu, one of the community members participating in the survey, motivates his bearish outlook towards the common currency by saying that "all pair's movements developments, during the next week will depend on FOMC statement." He also added that "a rate hike time table will not become more clear, thus I am expecting non-substantial retreat of the Euro."
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Feb 18 and Mar 18 expect, on average, to see the currency pair around 1.10 by the end of June. Though the majority of participants, namely 54% of them, believe the exchange rate will drop down even below this level in ninety days, with 26% alone seeing it below 1.04. Alongside, 26% of those surveyed reckon the price will trade in the range between 1.10 and 1.16 by the end of June of this year.
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