- Commands to buy the Euro versus the US Dollar in 100-pip range returned to negative (42% bullish / 58% bearish)
- The closest resistance for this pair is located at 1.1257
- At the same time, the closest support is currently placed at 1.1101
- Upcoming events on May 5: US Trade Balance (Mar), Services PMI (Apr) and ISM Non-Manufacturing PMI (Apr)
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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.
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US trade balance expected to deteriorate amid strong Dollar
Following strong month of February in terms of US trade balance numbers, this indicator is estimated to drop back in March. The deficit has probably stayed at $39.2 billion during that month, up from $35.4 billion in February, while stronger Greenback is offsetting gains from lower energy imports.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 1.15 mark where long-term downtrend will most probably push the cross back in the direction of 1.05-1.10 area. In the meantime, the Euro's parity against the US Dollar is not off the table in the long-term.Daily chart
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On a short-term chart, EUR/USD is trading in a rather wide range between two major technical levels at 1.1257 (23.6% Fibo) and 1.11 (weekly PP). Strengthened by 100-day SMA and Bollinger band from above, the Fibonacci retracement is likely to energize bears for pushing the single currency downwards. At the same time, the weekly PP is defending itself alone, meaning that a close below this line will open the opportunity to slump as low as 1.10 (monthly PP) in the near-term.
Hourly chart
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Read More: Technical Analysis
EUR/USD sentiment and pending orders are bearish
Pending orders to buy the Euro against the US Dollar in 100-pip range from the spot price returned back to the negative territory on Monday as they reached only 42%, down 12% over the weekend. It proclaims that in case the EUR/USD rises in value, the pair's potential rebound should be capped by the 100-day SMA, currently at 1.1282. On the other hand, a downward development of the Euro is assumed to be extended further down to the weekly PP at 1.1101.
Spreads (avg,pip) / Trading volume / Volatility
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Apr 4 and May 4 expect, on average, to see the currency pair just below 1.08 by the end of August. Though the majority of participants, namely 54% of them, believe the exchange rate will drop significantly below this level in ninety days, with 35% alone seeing it below 1.04. Alongside, 27% of those surveyed reckon the price will trade in the range between 1.08 and 1.14 by the end of August of this year.
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