The gains of the Euro against the US Dollar during the surprise jump of this week have been erased. Moreover, the pair shows signals of an upcoming decline. Although due to Easter holidays volatility has decreased, there is still enough force in the market to cause fluctuations in the currency exchange rate. Due to that reason it is expected that a significant move might occur after all.
US producer prices dropped unexpectedly last month due to the lower cost of services and energy products. The Labour Department reported on Thursday that its Producer Price Index dropped 0.1% in March, following the preceding month's gain 0f 0.3% and falling behind analysts' expectations for a 0.0% reading. That marked the first decline since August 2016. On an annual basis, however, the PPI was up 2.3% last month, the largest gain since March 2012, compared to February's increase of 2.2% The cost of services fell 0.1%, accounting for about 75% of the drop. The price of energy plunged 2.9%, with gasoline prices falling 8.3%. Back in February, energy prices were 0.6% up.
Upcoming events: CPI and Retail Sales
EUR/USD retreats back to 1.06 level
During the early hours of Friday's trading session the common European currency traded near the 1.06 level against the US Dollar, and the pair was positioned for a decline during the day's trading. The rate had almost erased all the gains of Wednesday, as it fell below the combined support of the 100-day SMA at 1.0626 and the weekly PP at the 1.0621 mark. These levels of significance on Friday were providing resistance, which the pair had failed to break. Due to that reason it is possible that the currency exchange rate will after all decline to the weekly S1, which is located at the 1.0552 level. However, it might stop at the long term channel's lower trend line near 1.0585 level.
Daily chart
Hourly chart
SWFX traders remain undecided
SWFX traders remain neutral bullish, as 52% of open positions are long. Meanwhile, 52% of set up orders are to sell the Euro.
OANDA traders have increased their bullish outlook, as 60.66% of trader open positions are long on Friday, compared to 55.75% previously. Meanwhile, SAXO bank clients remain almost neutral, as 52.78% of open positions are long now, compared to the 52.09% short positions on Thursday.
Spreads (avg, pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.08 in July
Traders, who were questioned on their longer-term views on EUR/USD between March 14 and April 14 expect, on average, the currency pair to trade around 1.08 at the start of July. In general, 50% (+4%) of participants believe the exchange rate will be generally above 1.08 in ninety days, and 27% (+2%) see it above 1.12. In the meantime, 7% (-2%) of those surveyed reckon the pair will be at parity or below.