- Commands to buy the Euro versus the US Dollar in 100-pip range from the spot are marginally bearish (49% long / 51% short)
- The closest resistance for this pair is located at 1.1114
- At the same time, the nearest support is currently placed at 1.1025
- Upcoming events in the next 72 hours: France and Italy Industrial Production (May), EU Leaders Special Summit
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Athens has submitted belt-tightening proposals to try to unlock a new bailout package from its European creditors just two hours before a midnight deadline. The government of Greek Prime Minister Alexis Tsipras asked for a three-year bailout loan of 53.5 billion euros, in a last-minute effort to keep the country within the Euro zone. In return, Greece offered a package of reforms and spending cuts, including pension savings and tax hikes, similar to those presented by creditors last month. The proposal will be presented to the Greek Parliament later today and is set to be discussed at the European Union summit in Brussels on Sunday.
The measures submitted to European officials include tax increase on shipping companies, unifying VAT rates at 23%, including restaurants and catering, 300 million euros defence spending cuts by 2016, and phasing out solidarity grant for pensioners by 2019. The Greek government said it would use the three-year loan from the European Stability Mechanism to cover debt repayments between 2015 and 2018, mostly to the International Monetary Fund and the European Central Bank.
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Greece's future to be decided at Euro summit on Sunday
Leaders of the European Union's all 28 member states are going to meet in Brussels on Sunday. The main purpose of the meeting will inevitably be Greece, which has to agree the new bailout conditions with its creditors until that day if it wants to avoid an exit from the Euro zone. Meanwhile, on Friday both French and Italian industrial production data will be released at 6:45 AM GMT and 8:00 AM GMT, accordingly. Both countries are expected to see a rebound of this indicator for the month of May.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
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EUR/USD managed to defend its gains yesterday, after a disappointing data release on US jobless claims. However, the pair was actively supported by the 100-day SMA, and this level is sending the Euro higher in the early Friday trading. The immediate resistance is still represented by the weekly PP at 1.1114, followed by the monthly PP/55-day SMA at 1.1160. Therefore, major gains are not included in the main scenario at the moment, while daily indicators are bearish.
Hourly chart
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Read More: Technical Analysis
EUR/USD sentiment back above 50%, pending orders approach neutral level
Meanwhile, the portion of pending orders to buy the Euro against the US Dollar in 100-pip range from the spot price added two additional percentage points over the past 24 hours and is now just one percentage point below the 50% mark.
It still proclaims that in case the EUR/USD rises in value, the pair's near-term gains can be capped by the 20-day SMA, currently at 1.1132. On the other hand, a downward development of the Euro is likely to be extended below the 100-day SMA at 1.1025.
Spreads (avg,pip) / Trading volume / Volatility
Community is waiting for the Euro to plunge versus the US Dollar this week
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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 10 and Jul 10 expect, on average, to see the currency pair around 1.12 by the end of October. Though the majority of participants, namely 52% of them, believe the exchange rate will drop below this mark in ninety days, with 37% alone seeing it below 1.08. Alongside, 18% 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.
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