- Commands to buy the Euro versus the US Dollar in 100-pip range from the spot are bullish (57% long / 43% short)
- The closest resistance for this pair is located at 1.1245
- At the same time, the closest support is currently placed at 1.1127
- Upcoming events on June 4: US Unemployment Claims (May 30), France Unemployment (Q1)
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For the first time this year, consumer prices across the 19-country currency bloc edged higher, easing fears that the Euro zone is set for a prolonged Japan-style era of deflation. According to a report from Eurostat, consumer prices across the Euro bloc climbed 0.3% last month from the year before, with energy prices becoming less of a drag. More surprisingly, core inflation, which excludes volatile components such as energy, food, alcohol and tobacco soared to 0.9%, the fastest rate since August 2014.
In January, when the European Central Bank announced its quantitative easing programme, Euro zone consumer inflation stood at minus 0.6%. Now, less than three months since bond purchases have begun, inflation has rebounded quickly to 0.3%. Nevertheless, inflation remains far below the ECB's target of below, but close to 2%.
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Euro to lack drivers on Thursday after busy Tuesday and Wednesday
The most traded currency pair is expected to be influenced by just a few important data releases on Thursday, following rich fundamentals on Tuesday and Wednesday. The French jobless rate for the first quarter of 2015 is due at 5:30 AM GMT. In the afternoon, however, the US weekly unemployment claims are going to be published at 12:30 PM GMT.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 surged the most in more than two months on Tuesday, helped by the Euro zone returning to inflation. Bullish movement was only stopped around the 1.1150, when the pair had already accumulated a 230-pip daily climb. A number of important resistances were violated, and now the pair is free to jump further up to the weekly R3 at 1.1245. However, downside risks are not off the table, especially in case the Euro fails to consolidate strongly above 1.1089 (monthly PP; 100-day SMA).
Hourly chart
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Read More: Technical Analysis
EUR/USD sentiment remains bearish; orders improve after EUR/USD's upward move
Meanwhile, pending orders to buy the Euro against the US Dollar in 100-pip range from the spot price increased considerably during the past 24 hours to surpass the 50% mark, and this move was triggered by the pair's rally yesterday. All in all, long commands reached 57% in the morning on Wednesday.
It proclaims that in case the EUR/USD rises in value, the pair's near-term gains are likely to be extended up to the weekly R3 at 1.1245. On the other hand, a downward development of the Euro should be capped by the monthly pivot point at 1.1089.
Spreads (avg,pip) / Trading volume / Volatility
Community is waiting for the Euro to depreciate against the US Dollar this week
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Read More: Community Forecasts
aslamhammad, one of the community members participating in the survey, motivates his bearish outlook towards the single currency by saying that "EUR/USD will close lower on this Friday 5th of June." He also expects "the European Interest rate to remain unchanged at 0.05%."
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between May 3 and June 3 expect, on average, to see the currency pair around 1.12 by the end of September. Though the majority of participants, namely 56% of them, believe the exchange rate will trade below this level in ninety days, with 39% alone seeing it below 1.08. Alongside, 19% of those surveyed reckon the price will trade in the range between 1.12 and 1.18 by the end of September of this year.
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