- Commands to buy the Euro versus the US Dollar in 100-pip range from the spot are currently slightly negative (49% bullish / 51% bearish)
- The closest resistance for this pair is located at 1.1219
- At the same time, the closest support is currently placed at 1.1048
- Upcoming events on May 12: US Monthly Budget Statement (Apr)
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German industrial production unexpectedly decreased in March, adding to signs that Europe's powerhouse remained vulnerable to global economic headwinds. Industrial output declined 0.5% in the reported month following stagnation in February, while production climbed 0.1% from a year earlier.
A separate report showed German imports rose more than exports in March. Seasonally adjusted exports climbed by 1.2% on the month in March, while imports increased by 2.4%, according to the Federal Statistics Office. As a result, Germany's trade surplus narrowed to 19.3 billion euros from 19.7 billion euros. Measured on an annual basis, Germany exported goods and services soared 12.4% to 107.5 billion euros, while imports hit 84.5 billion euros, a 7.1% increase.
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US budget surplus to reach $138 billion in April
Every year in April, the US budget balance is usually showing a surplus, meaning that revenues are exceeding expenditures. This is likely to be the case this year as well, when the Department of Treasury will publish numbers for the previous month tomorrow. Following a deficit of $52.9 billion in March, the indicator is assumed to show a $138 billion positive balance in April.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 touching the previous week's high at 1.1392, the EUR/USD currency pair was sent considerably to the downside. The Euro is now declining for a third consecutive day on Monday, with trading levels located below 1.1150. Despite that, the price is still remaining above the 20-day SMA at 1.1044 and Mar 26 high at 1.1052. While the pair is hovering above these two supports, there is a good chance of recovery in the near-term.
Hourly chart
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Read More: Technical Analysis
EUR/USD sentiment and pending orders are bearish
At the same time, pending orders to buy the Euro currency against the US Dollar in 100-pip range from the spot price added one percentage point over the weekend to stay at 49% this morning. It proclaims that in case the EUR/USD rises in value, the pair's potential rebound can be capped by the 100-day SMA, currently at 1.1227. On the other hand, a downward development of the Euro is assumed to be extended 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 11 and May 11 expect, on average, to see the currency pair around 1.09 by the end of August. Though the majority of participants, namely 49% of them, believe the exchange rate will be still below even the 1.08 level in ninety days, with 29% alone seeing it below 1.04. Alongside, 24% 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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