- Commands to buy the Euro versus the US Dollar in 100-pip range are positive (38% bullish / 62% bearish)
- The closest resistance for this pair is located at 1.0712
- At the same time, the closest support is currently placed at 1.0621
- Upcoming events on March 21-23: Euro zone Consumer Confidence (Mar), US Existing Home Sales (Feb)
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The European Central Bank held one more round of Targeted Long-term Refinancing Operations programme, which is aimed to improve bank lending to Euro zone's non-financial private sector and stimulate economic recovery. This monetary policy tool, launched in June 2014, was decided to stay in place, even though the ECB began purchasing government bonds in March under the new QE programme.
The ECB's goal also includes expanding its balance sheet by one trillion euros by the end of 2015. However, by holding the third scheduled round of TLTROs on Thursday, the pan-European regulator allocated just 97.8 billion euros to banks in the single currency area, down from 129.8 billion euros during the previous offer in December, but much more than 40 billion euros expected.
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New week to begin with no major news from Eurozone and US
The whole next week is expected to deliver less fundamental statistics than usually, while Monday will stay especially silent. The only two indicators with medium importance levels are going to be the Euro zone's consumer confidence index from the Eurostat and existing home sales in the US for the month of February.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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A sharp decrease in the value of the Euro on Thursday followed a surge that took place a day before, following the Federal Reserve meeting. EUR/USD dropped below 2003 low and monthly S3, but was surprisingly stopped by the weekly pivot point at 1.0621. Despite all, this level is currently attempting to push the common currency back upwards. However, considering a dense supply area around 1.0750, an advance above this level in highly unlikely, while depreciation seems more realistic at the moment.
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 returned back to negative numbers and account for 38% in the morning on Friday (55% on Thursday). It proclaims that in case the EUR/USD rises in value, the pair's potential rebound can be limited by the 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 S1 at 1.0335.
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 20 and Mar 20 expect, on average, to see the currency pair around 1.09 by the end of June. Though the majority of participants, namely 44% of them, believe the exchange rate will drop down even below 1.08 in ninety days, with 29% alone seeing it below 1.04. Alongside, 32% of those surveyed reckon the price will trade in the range between 1.08 and 1.14 by the end of June of this year.
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