- Commands to buy the Euro versus the US Dollar in 100-pip range are negative (36% bullish / 64% 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 6: Euro zone Services PMI (Apr) and Retail Sales (Mar), Non-Monetary Policy ECB Meeting, US ADP Employment Change (Apr)
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Euro zone's manufacturing PMI came at 52.0 in April, beating expectations for a no change from 51.9 points a month before. Slower pace of development is considered to be disappointing, since it was expected that ECB's QE would bring more pronounced boost and recovery. Elsewhere, German manufacturing PMI advanced to 52.1, overshooting expectations of 51.9.
Meanwhile, French manufacturing sector's activity dropped to 48.0 points, down from 48.8 in March and also worse than estimated by analysts at 48.4. French manufacturing sector has been in the contraction territory since May of the previous year. Despite falling prices, demand for any kind of products stepped lower, which weakened growth of new businesses and manufacturing industry, in particular.
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ADP employment data to be in focus on Wednesday
Employment change data from the United States will be closely monitored by markets tomorrow, as the ADP is releasing numbers for April of this year. American employers have probably added 198,000 new jobs last month, up from 189,000 a month before. Besides that, the Euro zone's retail sales are expected to reveal a further monthly decline of 0.3% in March, even despite the economic recovery in the region.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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After strongly upbeat movement of EUR/USD last week, as can be clearly observed on a weekly chart, this week the pair seems to be edging lower on correction. Fuelled by 100-day SMA, the Euro leaves the risk of being pushe11d down below 1.11 in the near-term. This support, in case of a violation will refocus the main target at 1.10 (monthly PP). However, in the medium-term the pair remains biased in favour of a cautious recovery, especially if it manages to close above 1.1270 eventually.
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 dropped further during the past 24 hours of trading to reach just 36% on Tuesday, down six percentage points on a daily basis. 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 1.1267. On the other hand, a downward development of the Euro is assumed to be extended further down to the monthly PP at 1.1003.
Spreads (avg,pip) / Trading volume / Volatility
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Apr 5 and May 5 expect, on average, to see the currency pair just below 1.08 by the end of August. Though the majority of participants, namely 55% of them, believe the exchange rate will drop significantly below this level in ninety days, with 34% alone seeing it below 1.04. Alongside, 26% 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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