On Thursday morning the EUR/USD currency exchange rate made attempts to break through a significant resistance level, and it looked like it will succeed in its efforts. The weekly R2, which is holding down the Euro against the US Dollar has been holding the currency exchange rate lower since it stopped the Tuesday's jumps. However, various clues indicate that it will be broken.
Consumer inflation in the Euro zone rose in line with analysts' expectations last month, official figures revealed on Wednesday. Eurostat reported that its Final Consumer Price Index came in at 1.5%, compared to the preceding month's gain of 2.0%. However, the March figure came in line with forecasts. Back in February, the headline inflation rate hit the European Central Bank's target, raising expectations of a major change in the Bank's monetary policy. Nevertheless, following the February release, the ECB President Mario Draghi noted that inflation was in large part boosted by rising oil prices, while core inflation growth remained subdued. Wednesday's data confirmed Mario Draghi's outlook and lowered the possibility of the ECB tightening its monetary policy.
Upcoming events: US data and Mnuchin's speech
EUR/USD remains below resistance
On Thursday morning the common European currency against the Greenback remained below the second weekly resistance, which stopped the pair's Tuesday's jump. The resistance level is located at the 1.0729 mark. It is possible that the currency exchange rate will retreat to the 1.0687 level, where the 20-day SMA together with the monthly PP are located at. On the other hand a break of the weekly R2 would free up the range up to the weekly R3, which is located at the 1.0780 level. However, most likely the pair will remain at the current levels, as the markets are expecting the French presidential elections.
Daily chart
Hourly chart
Read More: Technical AnalysisMarket sentiment mostly bearish
Traders remain bearish, as 53% of open positions are short. However, 54% of trader set up orders are to buy the Euro.
OANDA traders are the only ones bullish, as 53.21% of trader open positions are long on Thursday, compared to 50.76% previously. However, SAXO bank clients remain bearish, as 58.43% of open positions are short now, compared to the 58.31% positions on Wednesday.
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 20 and April 20 expect, on average, the currency pair to trade around 1.08 at the start of July. In general, 50% (+1%) of participants believe the exchange rate will be generally above 1.08 in ninety days, and 20% (+1%) see it above 1.12. In the meantime, 8% of those surveyed reckon the pair will be at parity or below.