- Commands to buy the Euro versus the US Dollar in 100-pip range are positive (54% bullish / 46% bearish)
- The closest resistance for this pair is located at 1.1257
- At the same time, the closest support is currently placed at 1.12
- Upcoming events on May 4: Euro zone Manufacturing PMI (Apr), US Factory Orders (Mar)
© Dukascopy Bank SA
After four consecutive months in the red, the Euro bloc's consumer inflation recorded zero growth in April, adding to signs that deflationary fears have been easing. In the previous month cost of living dropped 0.1%. Despite the positive development, the headline inflation has remained in what the European Central Bank calls the 'danger zone', below 1% for 19 consecutive months.
A separate report showed jobless rate in the Euro bloc climbed to 11.3% in March, whereas economists had expected a decline to 11.2%. However, the German labour market continued to improve, as the number of unemployed fell for the seventh straight month. Destatis said the number of people out of a job declined by a seasonally adjusted 8,000 in April.
Watch More: Dukascopy TV
Euro area manufacturing activity expected to stay unchanged
Even though the majority of European countries will release the PMI activity indicators for manufacturing industries on Monday of the next week, no significant changes are currently predicted by the market. German and French, as well as the Euro zone's benchmarks are forecasted to be flat at 51.9, 48.4 and 51.9 points, correspondingly.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
The single European currency jumped for a seventh day in a row versus the Greenback on Thursday. EUR/USD violated the weekly R3 at 1.12 and even attempted to test the next major resistance at 1.1257 (23.6% Fibo). However, the latter level managed to deal with significant bullish pressure and sent the Euro back towards 1.12. Despite gaining 500 pips in last seven days, the pair's up-trend may come to an end, unless it consolidates above 100-day SMA, which is currently located at 1.1294.
Hourly chart
© Dukascopy Bank SA
Read More: Technical Analysis
EUR/USD sentiment remains negative, pending orders surge
Pending orders to buy the Euro against the US Dollar in 100-pip range from the spot price, however, advanced above the neutral level during the past 24 hours to reach 54% in the morning on Friday. It proclaims that in case the EUR/USD rises in value, the pair's potential rebound can be extended up to 100-day SMA at 1.1294. On the other hand, a downward development of the Euro is assumed to be capped by the monthly PP at 1.10.
Spreads (avg,pip) / Trading volume / Volatility
Community is waiting for the Euro to grow against US Dollar this week
© Dukascopy Bank SA
Read More: Community Forecasts
al_dcdemo, one of the community members participating in the survey, motivates his bullish outlook towards the common currency by saying that "the pair will break above 1.10 level in the near future. With weaker data from US, and Europe, which is back on recovery track." Moreover, he supposes that "uncertainty over Greece will be resolved by summer."
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Apr 1 and May 1 expect, on average, to see the currency pair around 1.07 by the end of July. Though the majority of participants, namely 50% of them, believe the exchange rate will drop even below 1.06 in ninety days, with 27% alone seeing it below 1.02. Alongside, 25% 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