- Commands to buy the Euro versus the US Dollar in 100-pip range from the spot are bearish (45% long / 55% short)
- The closest resistance for this pair is located at 1.0929
- At the same time, the closest support is currently placed at 1.0856
- Upcoming events on May 28: G7 Finance Ministers' Meeting (Day 2), US Unemployment Claims (May 22) and Pending Home Sales (Apr)
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After announcing an acceleration of money printing to boost bond buying before liquidity dries up during Europe's summer vacation period in July and August, the European Central Bank slowed its weekly pace of purchases. The central bank bought 11.819 billion euros worth of assets in the week ended May 22, marking the smallest increase in three weeks.
Under the quantitative easing programme which began in early March, the ECB aims to purchase 60 billion euros a month of bonds, asset-backed securities and covered bonds. The scheme is intended to last till September 2016, or beyond to ensure a sustained adjustment in the inflation path back towards the ECB's 2% target.
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US jobless claims projected to decrease slightly
Claims for unemployment benefits in the United States are forecasted to decrease marginally, down to 272,000 for the week ended May 22. Alongside, pending home sales in the world's largest economy are projected to add additional 0.8% in April, following a 1.1% rise a month before. Both indicators are due to be published at 12:30 PM and 14:00 PM GMT, respectively.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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On Tuesday, the single European currency remained under significant bearish pressure, as US fundamentals pushed EUR/USD below 1.09. The pair dropped to one-month lows and was stopped by the weekly S1 at 1.0856, the lowest level since April 28. The focus remains on the downside, while the medium-term target is currently placed at 1.0774 (Bollinger band / Apr 24 low), with the possibility to drop as low at 1.0740 (monthly S1).
Hourly chart
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Read More: Technical Analysis
EUR/USD sentiment are pending orders are bearish
Meanwhile, the commands to buy the Euro against the US Dollar in 100-pip range from the current market price recovered five percentage points from Tuesday to reach 45% this morning.
It proclaims that in case the EUR/USD rises in value, the pair's potential rebound is likely to be limited by the monthly pivot point at 1.1003. On the other hand, a downward development of the Euro should be extended down to monthly S1 at 1.0740.
Spreads (avg,pip) / Trading volume / Volatility
Community is waiting for the Euro to drop considerably against the US Dollar this week
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Read More: Community Forecasts
geula4x, one of the community members participating in the survey, motivates his bearish outlook towards the single currency by saying that "EUR/USD seems very bearish on the daily chart. Price has dropped sharply from 1.1466 recent highs. Resistance lies around 1.1200 round number. This area has capped price recently on May 21 and 22. Support lies around 1.1050 double-bottom area, which has held price at March 11-16 and April 13-14."
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Apr 27 and May 27 expect, on average, to see the currency pair around 1.12 by the end of August. Though the majority of participants, namely 49% of them, believe the exchange rate will trade below this level in ninety days, with 33% alone seeing it below 1.08. Alongside, 25% of those surveyed reckon the price will trade in the range between 1.12 and 1.18 by the end of August of this year.
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