- Commands to buy the Euro versus the US Dollar in 100-pip range from the spot are strongly bearish (34% long / 66% short)
- The closest resistance for this pair is located at 1.0818
- At the same time, the nearest support is currently placed at 1.0762
- Important economic events to follow in the next 24 hours: France Business Climate (Jul), Italy Industrial Sales/Orders (May)
Greece reopened its banks, cleared overdue debt repayments of 2.05 billion euros to the IMF and initiated payment of 4.2 billion euros in principal and interest to the ECB after Athens received emergency funding assistance from European authorities. Meanwhile, the Euro zone's current account surplus shrank in May, according to the ECB. The current account balance showed a surplus of 18 billion euros in the reported month, compared with 24 billion euros in April. Cumulated data for the twelve months to May, showed the surplus at 2.5% of Euro zone's GDP, compared with 1.8% a year earlier. Germany's current-account surplus, the biggest in the Euro region, fell to 11.1 billion euros in May, compared with a revised 21.2 billion euros in the preceding month.
A separate report showed German factory prices fell in June, when measured on a monthly basis. The reading declined 1.4% following a flat print in May and compared with a 0.1% increase predicted by analysts. Measured on an annual basis, producer prices in Europe's number one economy slid 0.1% in the reported month after the 1.3% drop in May. Meanwhile, consumer prices dropped 0.1% on month in June. In annual terms, the cost of living in Germany climbed 0.3% in June. The Bundesbank sharply revised downwards its inflation outlook for this year to 0.5% from the 1.1% seen in December in its latest monthly report. The bank expects inflation rebounding to 1.8% in 2016, and then hitting 2.2% in 2017.
European or US markets wait for tomorrow as Tuesday brings no data
There will be no important publications of fundamentals both in Europe and the US today. Tomorrow morning, however, the French business sentiment indicator will be released by INSEE at 6:45 AM GMT, but it is expected to remain unchanged at 100 points in July. Additionally, Italian industrial orders and sales are awaited in the next 24 hours, as this data will be announced at 8:00 AM GMT tomorrow.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
Despite showing almost no movements on Monday, the EUR/USD cross managed to approach the May low at 1.0818 but failed to close below this level. A consolidation below this mark as soon as Tuesday will give a positive sign for bears to prolong the sell-off down to the 2003 low at 1.0762. This 12-year minimum coincides with the lower Bollinger band, thus creating a reliable medium-term support. Nonetheless, both daily and monthly indicators are still giving signals to sell the Euro versus the Buck.
Hourly chart
EUR/USD sentiment remains positive, pending orders are bearish
Meanwhile, the portion of pending orders to buy the Euro against the US Dollar in 100-pip range from the spot price remains fairly low, as bullish side added just one extra percentage point from yesterday, up from 33% to 34%.
It indicates that in case the EUR/USD rises in value, the pair's near-term gains should be limited by the monthly S1 at 1.0875. On the other hand, a downward development of the Euro can be extended as low as the 2003 low at 1.0762.
Spreads (avg,pip) / Trading volume / Volatility
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between Jun 21 and Jul 21 expect, on average, to see the currency pair around 1.11 by the end of October. Though the majority of participants, namely 53% of them, believe the exchange rate will drop even below 1.10 in ninety days, with 33% alone seeing it below 1.06. Alongside, 22% of those surveyed reckon the price will trade in the range between 1.10 and 1.16 by the end of October of this year.