- Commands to buy the Euro versus the US Dollar in 100-pip range from the spot are bearish (40% long / 60% short)
- The closest resistance for this pair is located at 1.1031
- At the same time, the nearest support is currently placed at 1.0949
- Upcoming events in the next 24 hours: FOMC Minutes, Germany Trade Balance (May)
© Dukascopy Bank SA
Greece has 48 hours to come up with a reform plan to secure a deal with its European creditors, and keep the country within the Euro bloc. Greek Prime Minister Alexis Tsipras has until Friday to present a new proposal; however, German Chancellor Angela Merkel said she hoped to receive convincing reform commitments from Tsipras on Thursday so that the German parliament could authorize talks on a new aid programme.
EU Commissioner for the Euro Valdis Dombrovskis said the EU wants Greece to remain in the Euro zone but it could be forced out if it does not prepare a credible reform package. On Sunday, a gathering of all 28 members of the European Union will be held - a day after the new Greek proposals are expected to be scrutinized by the Euro zone finance ministers. French President Francois Hollande said the European Central Bank would guarantee that Greek banks had the minimum necessary liquidity to stay afloat until Sunday.
Watch More: Dukascopy TV
FOMC minutes to be published today
On Wednesday the Fed's Federal Open Market Committee will release the minutes from its most recent meeting, which took place three weeks ago. In the meantime, any important European news will only be announced tomorrow, including German Trade Balance on Thursday morning at 6:00 AM GMT. The positive balance between exports and imports is forecasted to decrease slightly in May to 20.6 billion euros, down from 22.3 billion euros seen a month before.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 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
© Dukascopy Bank SA
EUR/USD tested the nearest demand area around 1.0950 yesterday. As a result, the last week's/Jun lows have been eroded, confirming the pair's intentions to depreciate further. However, the Euro failed to close below these levels by bouncing back above 1.10 by the end of trading. Nonetheless, the outlook remains moderately bearish, and the 100-day SMA at 1.1031 may force EUR/USD to make another attempt to penetrate the zone between 1.09 and 1.0950.
Hourly chart
© Dukascopy Bank SA
Read More: Technical Analysis
EUR/USD sentiment improves above 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 has rebounded by three additional percentage points during the past 24 hours, by climbing from 37% to 40%.
It proclaims that in case the EUR/USD rises in value, the pair's near-term gains can be capped by the 100-day SMA, currently at 1.1031. On the other hand, a downward development of the Euro is likely to be extended below the Jul 7 high at 1.0918.
Spreads (avg,pip) / Trading volume / Volatility
Community is waiting for the Euro to plunge versus the US Dollar this week
© Dukascopy Bank SA
Read More: Community Forecasts
geula4x, one of the community members participating in the survey, motivates his bearish outlook towards the common currency by saying that "EUR/USD is under bearish pressure after Greece has voted NO in the referendum on Sunday. This means that now Greece might exit the Euro Zone altogether. This poses a serious fundamental problem to the whole EZ. Resistance lies around 1.1130, which previously supported price between June 23 and 26. Support lies around 1.0900, which supported price at June 1st and 2nd, before a strong bounce higher."
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Jun 8 and Jul 8 expect, on average, to see the currency pair just below 1.12 by the end of October. Though the majority of participants, namely 51% of them, believe the exchange rate will drop below this mark in ninety days, with 33% alone seeing it below 1.08. Alongside, 21% 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.
© Dukascopy Bank SA