- Commands to buy the Euro versus the US Dollar in 100-pip range from the spot are bullish (60% long / 40% short)
- The closest resistance for this pair is located at 1.1446
- At the same time, the closest support is currently placed at 1.1348
- Upcoming events on May 19: Germany ZEW Economic Sentiment (May), Euro zone Final CPI (Apr) and Trade Balance (Apr), US Building Permits (Apr)
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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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German economic sentiment to cool down slightly in May
Tomorrow, the ZEW Centre for European Economic Research will release the economic confidence index for Germany, which is estimated to decrease slightly in May. The average expectation stays at 48.9 points, down from 53.3 points in April. Meanwhile, the Euro area's consumer prices are predicted to remain unchanged at 0% in April, as the final data is due tomorrow.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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EUR/USD traded in a broad range between 1.1330 and 1.1470 on Friday. Despite that, the pair has mainly remained below the long-term downtrend line, currently placed at 1.1448. Daily technical indicators are still pointing to the north. However, the pair must climb above the monthly R1 (1.1486) in order to confirm the bullish outlook. Bears, in turn, will try to prevent this scenario to happen by pressing the Euro down towards weekly PP at 1.1348.
Hourly chart
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Read More: Technical Analysis
EUR/USD sentiment stays bearish, while pending orders remain upbeat
Meanwhile, pending orders on this currency pair have been positive for the third day in a row. During the past 72 hours the commands to buy the Euro against the US Dollar in 100-pip range from the spot jumped by seven percentage points to hit the 60% mark in the morning on Monday.
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 weekly PP at 1.1348.
Spreads (avg,pip) / Trading volume / Volatility
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Apr 18 and May 18 expect, on average, to see the currency pair around 1.11 by the end of August. Though the majority of participants, namely 48% of them, believe the exchange rate will be even below the 1.10 level in ninety days, with 34% alone seeing it below 1.06. Alongside, 27% 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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