- Commands to buy the Euro versus the US Dollar in 100-pip range from the spot are slightly bullish (52% long / 48% short)
- The closest resistance for this pair is located at 1.1460
- At the same time, the nearest support is currently placed at 1.1360
- Upcoming events today: US Existing Home Sales (May), Euro Summit in Brussels
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The Greek Government presented a new reforms package to its international creditors to finally reach a compromise and seal a deal before an extraordinary summit of Eurozone finance ministers in Brussels later today. Angela Merkel, the German Chancellor, François Hollande, the French President, and Alexis Tsipras, the Greek Prime Minister are expected to attend. It was still unclear how far the new proposal met to creditors' demands for additional spending cuts and tax hikes, but the offer was a ray of hope that a last-minute deal may yet be reached before Athens runs out of cash.
Yet, Greece's concessions are said to include new taxes, the elimination of early retirement allowances and the country's target of a budget surplus of 1% of GDP. Greece's creditors are likely to strike a deal with Athens by extending its bailout by six months supplying 18 billion euros in rescue funds. Yet, creditors were still waiting for the Greek government to formally submit revised fiscal targets, pension cuts and tax increases in an attempt to secure the six-month lifeline.
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US existing home sales are due on Monday
The only fundamental release from either the Euro zone or US is going to be connected with the housing market on Monday. The data on existing sales in the world's largest economy in May is expected to be announced by 12:30 PM GMT, while the current expectation stays at 5.25 million homes sold, up from 5.04 million in April.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 volatile movements on Friday, the Euro managed to remain just below the monthly R1 resistance line around 1.1360. Today, however, the pair attempts to increase in value, even though it faces a tough band of resistances ahead. A direct near-term supply is offered by the May high and weekly R1 at 1.1460/67, followed by the Feb high at 1.1534. Therefore, the risks of failure are still in place, as EUR/USD may struggle to overcome the mentioned technical levels.
Hourly chart
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EUR/USD sentiment at lowest level in six weeks
Meanwhile, pending orders to buy or sell the Euro against the US Dollar in 100-pip range from the spot price remain on the positive side, even though the bullish share decreased further from 54% to 52% in the past 72 hours.
It proclaims that in case the EUR/USD rises in value, the pair's near-term gains can be prolonged as high as the May 2015 high at 1.1467. On the other hand, a downward development of the Euro is likely to be limited by the 23.6% Fibonacci retracement at 1.1294.
Spreads (avg,pip) / Trading volume / Volatility
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between May 22 and Jun 22 expect, on average, to see the currency pair around 1.11 by the end of September. Though the majority of participants, namely 57% of them, believe the exchange rate will trade even below 1.10 in ninety days, with 32% alone seeing it below 1.06. Alongside, 15% 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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