- Commands to buy the Euro versus the US Dollar in 100-pip range from the spot are bullish (53% long / 47% short)
- The closest resistance for this pair is located at 1.1454
- At the same time, the closest support is currently placed at 1.1373
- Upcoming events on May 18: Italy Trade Balance (Mar), German Bundesbank Monthly Report
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Greece continues to grate on nerves of its European creditors, with Greek Finance Minister Yanis Varoufakis saying Athens should delay repayment of billions of euros Greece owes to the European Central Bank. Athens will have to repay 6.7 billion euros to the central bank this summer. Varoufakis said that the Greek government would be unable to repay what it owed to the ECB on time.
Meanwhile, European Central President Mario Draghi said the central bank's stimulus measures will remain in place "as long as needed" until policy makers are confident inflation heads towards the targeted level. Draghi's comments countered some speculation in financial markets that a recent slew of upbeat fundamentals in the Euro zone would prompt the ECB to wind down its monthly 60 billion euro bond buying programme before September 2016.
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Italian trade balance to be in focus on Monday
There are only a few statistical releases expected to be published in the very beginning of the next week. Among them, Italy will release its trade balance data for March. At the same time, German Bundesbank will publish its monthly report, which usually contains detailed analysis of present and future economic conditions from the bank's point of view.Read More: Fundamental Analysis
EUR/USD likely to lose value, trading range to narrow down
Judging from EUR/USD's developments that took place since May of the previous year, the pair is clearly trading downwards on a long-term chart. At the same time, it seems that now the pair is being bounded between the 2014 low and long-term downtrend line, meaning that it is currently hovering inside the descending triangle pattern. Moreover, this pattern implies a narrowing trading range, while the break-out point can be reached by the end of August. In the medium-term the common European currency may surge up to the 1.1450 mark where long-term downtrend is able to push the cross back in the direction of 1.05-1.10 area. However, the pair can also assume a possibility of growing as high as 200-day SMA around five figures above the downtrend, before finally making a decision to commence a bearish correction.Daily chart
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By piercing through the weekly R1 at 1.1373, the EUR/USD currency pair has approached the long-term downtrend line, which has been active since May of the previous year. This line is additionally strengthened by the monthly R1 at 1.1486 and February high at 1.1534. Only a closure above all of these levels will assure market in the pair's strong bullish potential. Still, weekly and monthly technical indicators are pointing to the south at the moment, pointing on risks for the recovery.
Hourly chart
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Read More: Technical Analysis
EUR/USD sentiment stays bearish, while pending orders remain upbeat
Starting from the beginning of last week, pending orders on the EUR/USD currency pair were increasingly volatile every single day. During the past 24 hours the commands to buy the Euro against the US Dollar in 100-pip range from the spot declined strongly from yesterday's record-high level of 70%, but remained above the neutral distribution at 53% this morning.
It proclaims that in case the EUR/USD rises in value, the pair's potential rebound is likely to be extended up to the monthly R1 at 1.1486. On the other hand, a downward development of the Euro should be capped by the 23.6% Fibonacci retracement at 1.1294.
Spreads (avg,pip) / Trading volume / Volatility
Community is waiting for the Euro to stay unchanged this week
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Read More: Community Forecasts
Jignesh, one of the community members participating in the survey, motivates his bullish outlook towards the common currency by saying that "EUR/USD has recently taken out some major resistance at 1.1050 and 1.11 level. The pair should be supported to the downside and is poised for an upside move. Weekly & Monthly candlesticks indicate a continued bullish move, while dailies suggest a pullback early in the week."
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Apr 15 and May 15 expect, on average, to see the currency pair around 1.10 by the end of August. Though the majority of participants, namely 51% of them, believe the exchange rate will trade below this level in ninety days, with 39% alone seeing it below 1.06. Alongside, 28% of those surveyed reckon the price will trade in the range between 1.10 and 1.16 by the end of August of this year.
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