- Commands to buy the Euro versus the US Dollar in 100-pip range from the spot are bearish (36% long / 64% short)
- The closest resistance for this pair is located at 1.1114
- At the same time, the nearest support is currently placed at 1.1038
- Upcoming events in the next 24 hours: Germany Factory Orders (May), US Services PMI (Jun) and ISM Non-Manufacturing PMI (Jun)
The overwhelming majority of Greek voters decisively rejected the aid package. Some 61.3% voted "no" to bailout programme, against 38.7% who voted "yes". The rejection is likely to be the biggest factor driving markets this week. What could be most interesting is how Portuguese, Spanish and Italian government bonds perform Monday. If these peripheral countries suffer a precipitous spike in yields, this could spark concerns over whether Greece leaving the currency bloc might cause further contagion to other weaker Euro zone economies. German Chancellor Angela Merkel and French President Francois Hollande called an emergency summit on Tuesday to discuss the financial crisis.
Meanwhile. the Euro zone economy continued to show signs of a sustainable recovery, with the recent data from Markit on the regions' services sector confirming the view. The Euro zone's services PMI rose to 54.4 in June, up from 53.8 in the previous month. All the three biggest economies of the Euro bloc enjoyed a robust activity in the services sector, with the corresponding gauges rising in June.
US services PMI to advance in June, additional attention to post-referendum Greece
Activity in the US services sector is expected to increase in the month of June. The ISM Non-Manufacturing PMI Index has probably surged up to 56.3 points last month from 55.7 points seen in May. The data is due today at 14:00 PM GMT. Meanwhile, German Chancellor Angela Merkel will meet the French President Francois Hollande Monday in the aftermath of the Greek "No" vote in a Sunday's referendum.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 September. In the medium-term the common European currency may show spikes as high as 200-day SMA and 2005 low at 1.16, but the downtrend will remain the main resistance and should be capable of pushing the cross back in the direction of 1.05-1.10 area in the long run.Daily chart
EUR/USD has been considerably sold off in the morning on Monday after a quiet trading session last Friday, as market participants are pricing in results of the Greek referendum. Despite that, the pair found a support at the last week's low around 1.0970, while there appears a reluctance to move further downwards. The immediate resistance for bulls is placed at 1.1114 (weekly PP). On the contrary, potential losses can allow a drop down to 1.0875 (monthly S1).
Hourly chart
EUR/USD sentiment slightly below 50%, pending orders remain bearish
Meanwhile, the portion of pending orders to buy the Euro against the US Dollar in 100-pip range from the spot price plummeted further over the weekend, by losing four percentage points to just 36%.
It proclaims that in case the EUR/USD rises in value, the pair's near-term gains can be capped by the 55-day SMA, currently at 1.1147. On the other hand, a downward development of the Euro is likely to be extended down to the recent low around 1.0960.
Spreads (avg,pip) / Trading volume / Volatility
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Jun 6 and Jul 6 expect, on average, to see the currency pair around 1.12 by the end of October. Though the majority of participants, namely 51% of them, believe the exchange rate will trade below this level in ninety days, with 34% alone seeing it below 1.08. Alongside, 20% of those surveyed reckon the price will trade in the range between 1.12 and 1.18 by the end of October of this year.