- 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 1.1015
- At the same time, the nearest support is currently placed at 1.0973
- Important economic events to follow in the next 24 hours: US Industrial Production (Jun) and PPI (Jun), Eurogroup Meeting, Greece Parliament Bailout Vote, Fed Chair Yellen Testifies
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German investor morale deteriorated in July with debt deal talks between Greece and its European partners contributing to mounting pessimism among financial market experts to a limited extent. According to a survey by ZEW thin-tank, German economic sentiment fell to 29.7 points, compared with 31.5 in June, but slightly above the consensus forecast for a reading of 29.0. This was the fourth straight month that saw investors' confidence in Europe's number one economy decrease.
A separate report showed German annual inflation slowed sharply in June, a sign that the ECB's bond-buying programme has yet to yield its desired effect in the Euro zone's powerhouse. Cost of living in Germany rose by just 0.3% year-on-year, compared with the 0.7% increase in May. Consumer price inflation measured according to common European standards fell 0.2% from May, pushing the annual inflation down to 0.1% in June from 0.7% in May. Declining energy prices were the main downside contributor, as they were down 5.9% from June last year.
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Greek lawmakers to vote on bailout deal today, Yellen to testify in Congress
After intensive debates, the Greek Parliament is getting prepared to vote on the bailout programme any time today, which has been agreed back in the night between Sunday and Monday. Following that, the Eurogroup is going to hold a teleconference in order to discuss the successive steps. Meanwhile, the Fed Chairwoman Janet Yellen will testify before the US House of Representatives' Financial Services Committee, and markets expect that she may hint a possible rate hike as soon as September. Among fundamentals, US industrial production data is due at 13:15 PM GMT, which is forecasted to rebound by 0.2% in June.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 showed another relatively volatile trading session, also considering that both opening and closing levels of the day were located close to each other. The pair attempted to climb as high as weekly PP at 1.1090, but all gains were eventually erased. At the moment it hovers below the 100-day SMA at 1.1015, which is capable of sending the Euro substantially downwards. The initial support is the yesterday's low at 1.0964, followed by the Jul 7 low at 1.0916.
Hourly chart
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Read More: Technical Analysis
EUR/USD sentiment grows further, pending orders unchanged at 40%
Meanwhile, the portion of pending orders to buy the Euro against the US Dollar in 100-pip range from the spot price has been unchanged at 40% in the past 24 hours.
It indicates that in case the EUR/USD rises in value, the pair's near-term gains are likely to be limited by the weekly pivot point at 1.1094. On the other hand, a downward development of the Euro can be extended as low as 1.0916 (Jul 7 low).
Spreads (avg,pip) / Trading volume / Volatility
Community sees the Euro rebounding versus the US Dollar this week
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Read More: Community Forecasts
Jignesh, one of the community members participating in the survey, motivates his positive outlook towards the common currency by saying that "EUR/USD continues to struggle to take out weekly support at 1.0970. Last week, we once again saw strong buying in that area, leaving the pair to close with a bullish candle for the week. Dips should be bought this week as the US Dollar continues to be sold off against strong daily resistance."
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Jun 15 and Jul 15 expect, on average, to see the currency pair just below 1.12 by the end of October. Though the majority of participants, namely 49% of them, believe the exchange rate will drop below this mark in ninety days, with 36% 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.
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