- Commands to buy the Euro versus the US Dollar in 100-pip range are negative (44% bullish / 56% bearish)
- The closest resistance for this pair is located at 1.0938
- At the same time, the closest support is currently placed at 1.0811
- Upcoming events on April 28: US Consumer Confidence (Apr)
© Dukascopy Bank SA
German business morale improved further in the current month, as business confidence surged to the highest level in 10 months, a sign the Euro zone's number one economy is set to pick up steam on the back of massive stimulus and a favourable exchange rate. The Ifo institute's business climate index climbed for a sixth consecutive month to 108.6 from 107.9 in March. Analysts had forecast 108.4 points in the reported period.
Germany's Bundesbank remains upbeat about the country's growth prospects in 2015 and 2016 as it has recently raised its outlook, saying the economy will expand 1.8% in both years after previous estimates of 1.5% for 2015, and 1.6% for 2016.
Watch More: Dukascopy TV
US consumer confidence to grow further in April
Tomorrow, the Conference Board will release the consumer sentiment indicator for the US in April. It is expected to increase further to 101.6 points, up from 101.3 in March, thus prolonging the positive long-term tendency of last three years.Read More: Fundamental Analysis
EUR/USD likely to lose value with growing trading range
Judging from EUR/USD's developments that took place since July of the previous year, the pair is clearly trading downwards with a significant negative slope. At the same time, mid-March movements of the Euro have also confirmed a widening trading range of this currency pair, meaning it is currently hovering inside the broadening falling wedge pattern. By the end of June, the common European currency may surge up to the 1.13 mark where 100-day SMA and 23.6% Fibonacci retracement will most probably push the cross back in the direction of 1-1.05 area. In the meantime, the Euro may hit 1:1 against the US Dollar as soon as September-October. However, a presence of dense zone of technical levels may also considerably influence the time-frame for this important event.Daily chart
© Dukascopy Bank SA
Towards the end of last week, EUR/USD erased an important resistance at 1.0811, represented by the monthly pivot point. It allows the pair to build up a prolonged upside correction in the short-term, with a target at 55-day SMA (1.0938 at the moment). However, this level is strengthened by weekly R1 and the upper Bollinger band from the north, and these lines altogether are capable in holding bulls' intentions. Moreover, April highs are located around 1.1040, and they will put additional selling pressure on the Euro.
Hourly chart
© Dukascopy Bank SA
Read More: Technical Analysis
EUR/USD sentiment and pending orders are back below 50%
Pending orders to buy the Euro against the US Dollar in 100-pip range from the spot slumped to 44% over past 72 hours, following a completely neutral distribution of buy/sell commands on Friday. It proclaims that in case the EUR/USD rises in value, the pair's potential rebound can be limited by the 55-day SMA at 1.0938. On the other hand, a downward development of the Euro is assumed to be extended down to weekly S1 at 1.0720.
Spreads (avg,pip) / Trading volume / Volatility
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Mar 27 and Apr 27 expect, on average, to see the currency pair at 1.07 by the end of July. Though the majority of participants, namely 52% of them, believe the exchange rate will drop even below 1.06 in ninety days, with 26% alone seeing it below 1.02. Alongside, 26% of those surveyed reckon the price will trade in the range between 1.06 and 1.12 by the end of July of this year.
© Dukascopy Bank SA