- Commands to buy the Euro versus the US Dollar in 100-pip range from the spot are slightly bearish (48% long / 52% short)
- The closest resistance for this pair is located at 1.1245
- At the same time, the closest support is currently placed at 1.1171
- Upcoming events on June 16: Germany CPI (May) and ZEW Economic Sentiment (Jun), Euro zone Employment Change (Q1), US Housing Starts and Building Permits (Apr)
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Manufacturing industry in the Euro zone rebounded slightly by 0.1% in April on the monthly basis, following a sharp drop of 0.3% in March. However, an increase was much slower than economists have anticipated, as they waited for a 0.4% gain. Output from manufacturers, mines and utilities diverged from country to country; however, the largest contribution was made by two engines of the block's economy, namely Germany and France.
In the meantime, wholesale prices in Germany, the region's powerhouse, were positive for the fourth month in a row. They advanced by 0.5% last month, up from a 0.4% growth seen in the preceding month and stronger than predicted at 0.3%. The wholesale price index is an indicator of future inflation, and the published data may result in further strengthening of price trends in both Germany and the Euro zone later in the year.
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German economic sentiment to slide for third month
The ZEW Centre for Economic Research will release the economic confidence indicators for Germany and the whole Euro area tomorrow, with both numbers set to decline in June. The average expectation for Germany stays at 37.5 points, down from 41.9 in May. The data is due at 09:00 AM GMT on Tuesday.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 1.1330 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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In spite of trading in the turbulent environment on Friday, the Euro was broadly unchanged against the Dollar by the end of the trading session. EUR/USD attempted to fall as low as 20-day SMA at 1.1160, but all losses were erased and the pair climbed back toward 1.1260. At the same time, on Monday the cross started trading lower around 1.12; therefore there is a risk of a steeper decline in the short-term. However, the major support at 1.11 (monthly PP; weekly S1) should withhold any moderate bearish pressure.
Hourly chart
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Read More: Technical Analysis
EUR/USD sentiment flat for fifth day, long orders recover
Meanwhile, pending orders to buy or sell the Euro against the US Dollar in 100-pip range from the spot price rebounded during the weekend, but failed to reach the 50% threshold. Their total share added 17% to advance up to 48%.
It proclaims that in case the EUR/USD rises in value, the pair's near-term gains can be capped by the monthly R1 at 1.1360. On the other hand, a downward development of the Euro is likely to be extended down to the monthly pivot point at 1.1089.
Spreads (avg,pip) / Trading volume / Volatility
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between May 15 and Jun 15 expect, on average, to see the currency pair around 1.10 by the end of September. Though the majority of participants, namely 60% of them, believe the exchange rate will trade below this mark this level in ninety days, with 27% alone seeing it below 1.06. Alongside, 16% of those surveyed reckon the price will trade in the range between 1.10 and 1.16 by the end of September of this year.
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